Black-Owned Businesses Have Been Largely Shut Out Of Boston Contracts, City Study Shows

Less than one half of one percent of prime contracts the City of Boston awarded to private enterprises over a 5-year period went to Black-owned businesses, according to a study the city commissioned, portions of which were obtained by the GBH News Center for Investigative Reporting.

The city has not yet released the study publicly but many city officials have received the several-hundred page report done by BBC Research & Consulting at a cost of about $1 million.

The report surveyed more than 47,000 contracts worth almost $2.2 billion awarded by the city between 2014 and 2019. Black-owned businesses posted the lowest rates of contracts despite having the highest rates of businesses available to work with the city.

Black-owned businesses accounted for 3.5 percent of area enterprises available to undertake prime contracts and 5.6 percent of businesses ready for subcontracting opportunities, according to an executive summary of the study.

But these businesses won just a fraction of the city’s contracts: 0.4 percent of prime jobs and 1.6 percent of subcontracting work.

According to the report’s summary, Hispanic-owned businesses won only 0.8 percent of prime contracts and 2.4 percent of subcontracts with the city of Boston during the 5-year span.

The completion of the city’s extensive disparity report comes as Mayor Marty Walsh is awaiting confirmation of his appointment as labor secretary in President Joe Biden’s Cabinet. He appeared yesterday before a U.S. Senate hearing.

Nick Martin, a spokesman for Boston’s economic development department, said in a prepared statement that this is the first disparity study undertaken by the city in 18 years.

“While the results of this study are not surprising, they reaffirm our belief that more work needs to be done,” he said. “We look forward to putting forth actionable items in the coming days on how we will get to the root of the issues around disparities in city contracting.”

Walsh faced pressure last summer to boost the city’s spending with minority- and women-owned businesses and signed an executive order to revamp the public directory of such vendors, to train procurement officers in the city and to require departments to submit plans that prioritized more equitable contracting practices.

Recommendations in the city’s new disparity report call for increasing minority contracting goals, developing more uniform procurement policies across city departments and breaking up large contracts into smaller chunks so small businesses can compete for the work.

Gov. Charlie Baker's administration has also come under pressure to increase its discretionary spending with minority-owned businesses. Last year, GBH News reported that the state’s annual spending on contracts going to minority business owners had declined by $135 million over a 20-year period. The governor announced in November that he would elevate the state office that promotes minoirty business contracting to a stand-alone agecny.

A 2017 disparity study by State Division of Capital Asset Management and Maintenance (DCAMM) found that just one percent of design and construction spending by the state agency between 2010 and 2015 went to African-American contractors, down from about four percent in a previous study of spending between 1999 and 2004. DCAMM handles the state’s major public construction projects and manages state facilities.

Read the draft executive summary of the 2021 report here: