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How Can Cities Boost Minority-Owned Businesses? By Buying from Minority-Owned Businesses

Building on reforms in places like Atlanta, five new cities are now working to make their procurement strategies more inclusive.

When Maynard H. Jackson Jr. took over Atlanta city hall in 1974, one of his primary goals was to broaden the opportunities for minorities to do business with the city. The upstart mayor envisioned improved socio-economic conditions for people of color in an environment that was fair, equitable and welcoming for all. By the time he left office in 1982, Atlanta’s first black mayor had made remarkable strides in accomplishing his lofty aims, despite the social underpinnings of the times.

Atlanta had adopted the moniker “The City Too Busy to Hate” during the Civil Rights movement. But Maynard really moved Atlanta toward the realization of that slogan, by creating a legacy of inclusiveness in municipal procurement and providing opportunity for advancement both inside city hall and throughout the metropolitan region. The network of minority- and women-owned businesses, which received their first opportunities with the city of Atlanta, has continued to grow, with many of those local businesses continuing to work with Atlanta as well as other jurisdictions across the country.

Maynard was my mentor and friend, and I had the opportunity to work with him as he was guiding the city to a standard of business diversity that has set national benchmarks. I’m proud our firm was selected to expand upon the example he set by leading the latest iteration of City Accelerator, a joint initiative of the Citi Foundation and Living Cities to foster municipal innovation, which will be focused on increasing the diversity of municipal vendors and contractors to direct more dollars to local minority-owned businesses.

In June, the five cities selected to take this work on — Charlotte, Chicago, Los Angeles, Memphis, Milwaukee — began their journey together in Atlanta. Atlanta had participated in a previous City Accelerator effort focused on community engagement and was familiar with the important work that the program undertakes. Atlanta leaders — chief among them, Mayor Kasim Reed — offered to host the first convening of this cohort in an effort to expose the new participants to the city’s exemplary leadership in this area.

Acquiring goods and services to run our major cities is a critical task necessary to keep our operations effective. Meanwhile, building the capacity of small and diverse businesses helps to encourage a vibrant and healthy local economy. Having local governments engaged in taking an equitable approach to procurement helps to ensure that there will be equal business opportunity — a dream of Maynard’s — for business owners of colors to compete, grow and improve their socioeconomic conditions. However, doing business in this manner is a daunting proposition, often complicated by cultural challenges, bureaucratic boundaries and legal pitfalls. Regardless, this endeavor adds significant value to the fabric of a city.

The cities in this initiative, as well as others who were working to create inclusive local economies, will tackle challenges of infrastructure, insufficient resources, a need for re-engineered business practices, decentralized and disjointed processes, political will and cultural changes, with the goal of making economic opportunity more inclusive and using these opportunities to improve the outcomes and conditions of disadvantaged people.

Despite these and other challenges, leaders from these five cities have already made strides toward more inclusive business dealings. Each city’s team has brought to the table tools that are increasingly pushing the boundaries of innovation. Based upon what I’ve seen, they are well equipped to succeed.

In 2013, the city of Charlotte applied the recommendations of a disparity study to create Charlotte Business INClusion, a hybrid minority, women, and small business enterprise (MWSBE) program that set both race- and gender-conscious goals as well as race- and gender-neutral procurement targets. In a certified vendor pool dominated by minority- and women-owned businesses, Charlotte saw a 51 percent increase in spending with MWSBEs from fiscal 2015 to fiscal 2016.

Chicago’s procurement office has continued execution of its Procurement Reform Task Force recommendations, which has helped produce their quarterly Buying Plan and other race-conscious and race-neutral approaches. Tools like the Buying Plan help city officials take intentional steps to engage and provide supportive services to their small and minority businesses. The Buying Plan looks ahead six quarters with the goal of deconstructing interdepartmental silos by standardizing the procurement information requested by all 29 city departments.

Los Angeles has the most minority- and women-owned businesses of any city in the nation, and city leaders have recognized the need for procurement reform and consolidation. The city has taken a critical look at its organizational operations, and has begun to build out new processes designed to increase inter-agency accountability and participation along with better support for its business community. Its Business Inclusion Program awarded a total of  $126.5 million in contracts to MWBEs during fiscal 2016 — more than 8.5% of the total share — but they acknowledge there is significant opportunity to grow.

The City of Memphis embarked upon its “We Mean Business” initiative, offering numerous programs with MWBEs in mind. From the “Propel: Diverse Business Accelerator” that helps to launch potential city partners from MWBEs to Hispanic outreach prioritizing connections between the city and Hispanic-owned businesses, Memphis has tackled a wide swath of procurement reform projects. As a result, city officials last year reported that more than $4.4 million was awarded through its Small Business Enterprise program, and they have made significant gains in total spending with MWBEs.

With more than 60 percent of Milwaukee’s population of roughly 600,000 being people of color, the city is constantly looking for ways to support its small and minority business community. Officials hope to capitalize on these opportunities by leveraging existing resources both internally and from outside the city, and by using these tools to expand inclusion and participation. Ultimately, they seek to increase the number of qualified small and minority businesses to perform on the prime contract level.

The ambitious goals and fantastic accomplishments achieved by each of these five cities set them apart from other municipalities, making them — among other things — ideal candidates for this City Accelerator initiative. We are excited for the opportunity to offer our expertise in leading them in their procurement reform and re-engineering process. Their previous commitments serve as hopeful indicators of continued increases to the rate of success they will enjoy upon completion of this program. Ultimately, we are convinced they can become beacons of light for the rest of our nation.

Each city’s achievements and individual programs advance the legacy of diversity in municipal and enterprise partnering that Maynard Jackson started here in Atlanta and envisioned for the nation.

The city of Atlanta set the example that through fairness, everybody wins, changing the culture of a city forever. All Maynard wanted was an equal business opportunity for everyone. It is our hope that by adopting these same ideals and these same perspectives, we will one day be able to say the same for the cities in this City Accelerator cohort.  

Rodney Caudle is director of Information Security at NIC Inc. (Nasdaq: EGOV), the nation’s premier provider of innovative digital government and secure payment processing solutions for more than 6,000 local, state and federal agencies across the United States. Contact him at
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