Of $17 Million In Boston COVID Contracts, Only One Went To A Local Minority Business

Despite the stated goal of Boston Mayor Marty Walsh to see more city contracts go to minority-owned businesses, especially ones based in Boston, less than two percent of more than $12 million in emergency coronavirus-related city contract dollars went to a Boston-based minority enterprise – and just one such business was represented among eighty businesses awarded those emergency contracts between March and June.

That’s according to data provided by the Walsh administration after a records request by City Council members and released less than an hour before a scheduled City Council hearing on the city’s progress toward diversity in city contracting.

The findings, first raised at that hearing by City Councilors Michelle Wu and Council President Kim Janey, and reviewed by WGBH News, do not necessarily contradict the Walsh administration’s assertion that the city is, in fact, making some progress toward more inclusion of minority- and women-owned businesses (known as MBEs, WBEs).

And Walsh administration officials have emphasized in public hearings as well as in conversations with WGBH News other signs of progress, overseeing some $17 million in city, federal and private emergency relief grants, of which some third to one half went to minority-owned businesses, the officials said.

But the figures would seem to cast a less rosy picture of what city officials have characterized as significant progress toward inclusion of MBEs and WBEs in more than $600 million in annual city contract spending, as well as in over $17 million in recent emergency spending on coronavirus measures.

And they come as Mayor Walsh doubles down on promises to take aggressively try to right historic inequities and injustices faced by Boston residents of color.

Minority-owned businesses (and those owned by women, veterans and other historically disadvantaged groups) have long been under-represented when it comes to the more-than $600 million the city now spends annually on outside contracts, for everything from snow removal to office supplies – a fact Walsh has acknowledged repeatedly.

Speaking at a recent public forum on race in Boston, sponsored by the Boston Globe, Walsh said “We’re not where we need to be on contracting.”

“[In] Atlanta’s number I think 30% of businesses of color have access to city contracts,” Walsh said. “We’re nowhere near that, we’re in single digits.”

Just over a year ago, the Boston Globe reported that minority and women-owned businesses made up less than 1% of city contract dollars awarded (Walsh administration officials have since revised that number to just over 5% by including businesses certified via state, rather than city processes).

Advocates for minority communities cite exclusion from city contracts as one way politically powerful groups have built wealth from taxpayer dollars while preventing minority groups from reaping those benefits.

Last October, Walsh signed an executive order aimed at a more inclusive city procurement process – the second such executive order signed by the mayor since he took office.

And last week, as the Council’s hearing on city procurement was getting underway, Walsh held a simultaneous press conference to announce his appointment of the city’s first-ever Chief of Equity and Inclusion, Dr. Karilyn Crockett, PhD.

Crockett, a professor of history and urban studies and MIT lecturer, opened her acceptance speech by saying that “For too long, Boston City Hall has been an agent of racism and exclusion and old crony gatekeeping of the city’s prosperity and power.”

But even as Crockett was making that speech, some City Council members were voicing skepticism, in a hearing on city procurement, of Walsh administration officials’ claims of progress in achieving minority inclusion in city contracts.

Councilor Michelle Wu challenged an assertion by Boston Economic Development chief John Barros that about one-third of $17 million in COVID-related spending had gone to minority- or women-owned businesses.

Barros acknowledged that the $17 million figure included about $5 million in emergency business relief grants – which, Wu noted, are different from contracts.

“In all the contracts that were given out during the COVID spending period, there was only one Boston-based business owned by a person of color that received a contract,” Wu told WGBH News.

That, Wu noted, amounts to “a little over 1.8% of the total COVID spending” that went to minority-owned businesses based in Boston.

“So those numbers are still very low,” Wu said.

Wu noted that the roughly $5.7 million in COVID-related contracts that were awarded to minority or women-owned businesses went to just three vendors, and consisted largely of a single $5 million contract awarded to an Asian-American owned business in Medford for Chromebooks for BPS students.

That, Wu said, meant that just a fraction of total COVID-related spending – less than two percent – had gone to a single Boston-based minority-owned business.

Barros confirmed that assessment.

Meanwhile, Council members disputed another set of numbers put forward by the administration, that seemed to show a marked increase in inclusion of minority-owned businesses in overall city contracting, outside of expenses related to coronavirus.

Celina Barrios, director of Equity and Inclusion for the Mayor’s Office of Economic Development, told Council members that in the city’s most recent, third fiscal quarter, the dollar amount of contracts going to minority-owned businesses had “more than doubled,” and represented nearly 8% of city contract spending.

But administration officials confirmed to WGBH News that that number also includes the one-time $5 million emergency contract for chromebooks awarded to a Medford business.

It's unclear to what extent, or even whether, the the city has seen a meaningful overall increase in participation in contracting by Boston-based businesses owned by minorities or women over the last year. While that rate appears to be just above 5% in total "discretionary" spending -- significnantly more than the 1% reported by the Globe a year ago -- city officials have since revised that 1% figure to just over 5% by including state-certified, in addition to city-certified MWBEs. According to that revised method of counting, inclusion of MWBEs in Boston appears to be only marginally higher than a year ago.

“The numbers have gone up, but we’re nowhere near where we need to be,” Council President Kim Janey told WGBH News.

City officials told WGBH News that the Walsh administration has made progress in including minority- owned businesses in city contracting, and noted that the $17 million in COVID-related emergency spending represents just a small fraction of the city’s overall spending on contracts.

The officials said the city is investing in outreach to eligible businesses and in assisting eligible businesses to become certified minority-, women- or veteran-owned enterprises. This year, Walsh administration has pledged to more than double staffing at the city’s office of Equity and Inclusion and is increasing the budget for outreach and certification assistance by some $2 million.

But for some Council members, as well as advocates, the latest figures released by the city don’t show that much progress so far.

“The city may have increased its numbers to whole numbers,” – rather than fractions of one percent, said Segun Idowu executive director of the Black Economic Council of Massachusetts (BECMA).

But, Idowu said, the figures released by the administration showed little evidence that the city is awarding significantly more contracts to minority-owned, and particularly Black businesses.

“We keep being lumped in, but ‘Minority’ does not mean Black – just ‘not white’ ” – “We have no idea what progress we’re making but I can say anecdotally that our membership has not been getting any contracts with the city, so we still have a long way to go,” Idowu told WGBH News.