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Study: City of Savannah contracts omit minorities, women

  • Rodney Strong, with Griffin & Strong, presents his firm's findings from a disparity study that examined the city's contracting process. Eric Curl/Savannah Morning News

The city of Savannah has a lot of work to do when it comes to ensuring a fair share of government contracts are going to businesses owned by minorities and women, according to the results of a disparity study presented to the City Council on Tuesday.

The study by Atlanta-based Griffin & Strong found that such businesses were being under-used as prime contractors and subcontractors in most work categories between 2010 and 2015.

About 93 percent of the almost $337 million in prime contractor payments went to non-minority and women-owned businesses (MWBEs), with Hispanic American-owned business getting 3 percent, women-owned business getting 2 percent, African- American-owned businesses getting 1 percent and Asian- or Pacific Islander-owned businesses rounding out the rest.

The findings were based on the number of businesses available to do the jobs and not on population, said Rodney Strong, with Griffin & Strong.

Such studies are required to be conducted on a regular basis — typically about every five years — for governments to implement programs such as Savannah’s Minority and Women-Owned Business Enterprise Program, which includes participation goals for projects, Strong said. Past court rulings have stated there must be evidence of discrimination for such programs to be enacted.

“You have to look at whether progress is being made and whether the goals are reasonable or not,” Strong said.

In Savannah’s case, the study found there is a lack of “buy-in” to the program by city staff and prime contractors and that MWBE firms were considered less competent and stigmatized.

The study also found instances of “stereotypical views” on the part of purchasing officials interviewed, as well as a lack of “checks and balances” for small purchases and subcontractor quotes.

“The information is not tracked the way it ought to be for a city this size,” Strong said.

The city was characterized as a “passive participant” in discrimination in that some barriers prevent firms from submitting bids and securing contracts such as pre-qualification, performance-bond and financing requirements.

If those barriers are high, there is not much the city can do about it, said Gregory Price, an economist who assisted in the study.

“It’s like driving by a car wreck and not offering assistance,” Price said.

Alderwoman Estella Shabazz, who has volunteered to serve as the council’s MWBE program adviser, said the issues must be corrected.

“It’s almost like it’s been a deliberate discouragement of (minority and women businesses) in our city,” Shabazz said.

There are exceptions. Hispanic-owned businesses were overused as prime contractors when it came to construction projects, while Asian Indian businesses were adequately represented as primes in the categories of professional services, general services and providing goods and materials.

In addition, women-owned businesses were overused when it came to serving as subcontractors for construction projects.

After the previous City Council’s approval of the $239,136 study in December 2014, the firm reviewed past contracts, conducted interviews, issued surveys and held meetings to develop its findings, according to Griffin & Strong officials.

City Manager Stephanie Cutter said the findings would serve as a guide for the city.

“This is very serious and we, of course, will focus on, where appropriate, making improvements,” Cutter said.

 

In other business

The council during the regular meeting Tuesday moved to request the Georgia Department of Consumer Affairs designate eligible areas around Hunter Army Airfield as Military Zones to boost economic development and new employment opportunities.

Designation of a Military Zone provides state tax benefits to businesses that create two or more jobs within economically-distressed areas near military bases. Those benefits include a $3,500 tax credit per year for up to five years, per new job created — with a minimum of two. Also, a business can claim credits against 100 percent of the Georgia Income Tax liability, with excess credit claimed against payroll withholding taxes.

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