From July 1, 2020 to December 31, 2020, there was a total of $249,915,039.46 spent on construction projects. Of the total, $4,701,694.00 (2%) were contracted to minority-owned businesses. Far less dollars were contracted to minority firms when compared to the previous year. This is below the City goal of having 11% of construction dollars contracted to minority firms. 

The level of attainment may be related to one or more of the following: availability of minority firms due to impacts of Covid-19, absence of minority prime and subcontracting bidders; unsuccessful minority prime bidders; lack of subcontracting opportunities being identified on projects by departments; some specialized projects that limit the ability to identify sufficient Minority-owned Underutilized Business Enterprises who may perform on projects; prime contractors who fail to meet goals, but demonstrate good faith efforts and some projects being below the dollar threshold ($30,000) to set goals. 

Resource: Open Data | City and County of Durham

What factors are pushing down on the curve ("negative/restricting factors")?

• Lack of agency commitment to equity: Racial equity is new to the organization and as a result, it is unclear how to create operating standards and embed equity norms across the agency. This, in turn, leads to inconsistencies in how projects are currently managed and an overall lack of accountability to equity outcomes. 
• Many minority firms aren't well-positioned to secure "large" or "specialized" contracts: Minority firms often lack the expertise, credentials, and capacity to lead large or specialized projects which account for a large percentage of the city's construction budget. Additionally, it is cost-prohibitive to become eligible for such contracts due to high equipment costs, increasing personnel costs, additional start-up costs (e.g., bonding, insurance, etc.), etc. that are often associated with these projects. 
• Identifying minority-owned firms can be challenging: Many minority-owned construction firms that could potentially be eligible for city contracts have not been identified/aren't in the pool of certified contractors. Furthermore, the management system is outdated and it is difficult to determine the skillsets/capabilities of the firms that are known. 
• Decentralized contracting processes: Every department has its own unique process for managing contracts which leads to inconsistencies in the agency's contracting functions, (e.g., bidding, RFPs, selection, management, payment, closing, etc.). (Note: The Office of Procurement is exploring how to centralize contracting processes to better forecast spending and to promote additional opportunities to underrepresented groups.) 
  • Applications: The application review process varies from program manager to program manager.
  • Information exchange: Information exchanged between departments can be both inconsistent and partial. 
  • Management: Lack of oversight and deep review of projects seeking exceptions. 
• Payment delays for sub-contractors: Invoices are paid 30-45 days after submission. As a result, minority sub-contractors experience payment delays from primary contractors that make it challenging to do business. 
• Limited sub-contracting opportunities:  There is a tension that exists in certain instances between getting a project done quickly vs expanding participation to new sub-contractors. Additionally, the nature of the work doesn't always lend itself to sub-contracting opportunities due to the contracting amount, the specialized nature of contracts, etc.
• Amount Spent vs. Percentage: Increased annual spending on minority-owned contracts doesn't necessarily mean that the percentage of spending will increase year-to-year. 
• Lack of willingness to engage due to bad contracting experiences: Issues with project managers and prime contractors have led many minority-owned firms to become disinterested in working with the City.  

What factors are pushing up on the curve ("positive/contributing factors")?

• "Niche Performers": Some minority-owned firms are doing well in the areas they occupy. However, there is a growing interest for these firms to take on larger and/or specialized contracts. 
• Organizational compliance: An ordinance exists to enforce race-equity interests. Departments adhere to compliance requirements when there is an expectation to do so. 
• Contractors have timely access to information: The city of Durham has a lasting reputation for making information available to potential contractors to better prepare them for new and future projects.
• Smaller projects are leveraged to prepare for larger projects: Administrators direct contractors to projects that are smaller in scale in order for contractors to get the requisite experience needed to compete for larger or specialized projects. 
• Departmental buy-in to equity: Departments reiterate the importance of equity and operate as an extension of the Race Equity Office.
• Data Monitoring: The organization is tracking "equity" data. 
• Mayoral & City Council Support:

Anticipated Factors/Additional Considerations

• By law, contractors are awarded to the lowest bidder for construction contracts. 

• Women and Minority-Owned Firms: Bid on contracting projects, provide feedback/guidance to the City on what works and what doesn't work, complete certifications via the HUB office, and serve as the primary stakeholder for this work. 
• Finance Department: Manages purchasing policies, coordinates policy changes, supports learning to ensure stakeholders understand the process, trains and monitors to ensure policies are followed, manages the database of women/minority-owned businesses. 
• Operations Departments (e.g., General Services, Public Works, Water Management, Transportation, etc.): Administer large contracts and are well-positioned to increase buy-in and advance equity and transparency.  
• Deputy City Managers: Primary supporters and enforcers of the value and importance of equity. 
• OEWD: Collaborator on training initiatives for identifying and developing diverse firms.  
• Prime Contracting Community: General contractors that provide subcontracting opportunities to minority-owned businesses.
• The Institute of Minority Economic Development (and similar firms): Have access to business owners who may not know about, or participate in, city contracts. Provide training and business development and in certain instances, access to capital.
• The HUB Office: Serves as the primary database for minority businesses in the State of NC. (Note: The system should operate as an effective resource to identify firms, but it needs to be improved.)
• Hispanic Chamber of Commerce and other minority-led business organizations: Address language barriers, training, and business development needs. 
• Private Firms: Assist with bonding and insurance costs for small, minority-owned businesses.
• NC MWBE Coordinators Network: Provide professional development and support, resources, training, etc. to promote the growth of minority and women-led businesses.
• United Minority Contractors Association: Help identify minority firms, lead training and business development, provide information on business opportunities, etc. 
• City Council & Mayor: [**Update**] Authority to move things along and enforce decisions (approval/disapproval of contracts within certain $ amount)  --> "Kick contracts back"!!
• Businesses that bid on city contracts that didn't win: Carry business insights into the contracting process that may be beneficial to others. 
• Business Opportunity Program Steering Committee: Reviews quarterly participation metrics and looks to enhance participation.   

• Accountability enforcement: Enforce consequences if expectations aren't met in relation to target setting and user experiences for minority-owned firms (both internal and external and these enforcement practices will differ accordingly)
  • Lack of accountability to advance equity in the contractors' user-experience 
  • Can the EBOP steering committee become a stronger accountability arm? 
  • Continue the efforts to embed the importance of race equity across the agency 
• Engage E&I Staff during preconstruction engagement: Have E&I staff involved in projects that are first being developed to focus on inclusion and equity at the outset. This will require organizational commitment at the senior level.
  • [**UPDATE**] Charlotte, NC is a potential model to review. They have a committee that meets to discuss the opportunities that are available and then they set project goals. Can include buy-in from leadership and create a feedback loop. Creates reinforcement for DEI efforts and reinforces the activities of E&I. Challenge: Unable to set project-to-project goals. How can this group move away from setting categorical goals to project-specific goals? 
• Explore opportunities to incentivize prime contractors to exceed contracting goals/participation targets (> 11%) 
  • (Chicago and NYC are great models)
• Enhance technical support: Support business owners to ensure that they have the capital, right equipment, personnel, etc. to complete projects.
  • Create mobilization/start-up funds: Money to get the labor force ready to bid for contracts. 
  • Provide funding for training and support to diversify the capabilities/skillsets of the firms to ensure that skills are reflective of the opportunities in the marketplace 
  • For specialized projects, identify additional firms to enhance technical support and leverage public/private partnerships 
• Revive mentor/protege programs for larger/smaller (minority-led) organizations: Include financial incentives, attach relationships to specific projects, etc. This helps to include minority-owned firms in specialized contracts. 
• Encourage minority firms that are currently being used by prime contractors to become certified by the state of NC.
• Survey contracting experience: Create a process to solicit feedback from the contracting experience from both contractors (awarded/denied) and project managers and update the process accordingly. This can perhaps take place during project closing. 
• Reduce the amount of time it takes to pay contractors (< 30-45 days)
• Data Management via the HUB Office: Update the system as an effective resource to identify firms.
• Implement target setting for construction contracts: Data is available from each department on a quarterly basis which helps to set targets.
  • Establish departmental contracting goals and hold them accountable (e.g., operational departments: General Services, Public Works, Water Management, Transportation, etc.) via performance reviews, etc. 
  • Set project-specific goals to be reflective of the real opportunities even beyond/below the 11% target. [**UPDATE**]
• Business Opportunity Program Steering Committee (EBOP): Review the role, structure, and goals of the committee and implement new ideas to improve the application process and develop/enforce bylaws.
  • Explore the possibility of having business owners participate in the Steering Committee. [**UPDATE**]
• Improve project forecasting: Develop solutions to better disseminate information on a timely basis regarding future projects. Host networking/outreach events tied to contracting opportunities. Broaden/target audiences who receive project information for upcoming projects through the newsletters, etc.
• Leverage public and private partnerships to gain access to a larger network to identify new contractors. 
• Use procurement contracts as a model of success.
• Explore additional ways to validate personnel within contractors/focus on contractors who fail to meet participation goals (Winston-Salem is a good model) 
• Explore opportunities to grow the "construction ecosystem" with a focus on Durham: Explore opportunities to support small, minority-owned businesses via capital resources and partnership opportunities. (e.g., CT Wilson has partnered with a local HS to create a pipeline for construction contracts). Develop local partnerships with Durham-based businesses.  
• Create a covenant to hire local minority-owned firms (e.g., Oakland, CA and Washington State)

Accountability enforcement: Enforce consequences if expectations aren't met in relation to target setting and user experiences for minority-owned firms (both internal and external and these enforcement practices will differ accordingly).

Engage E&I Staff during preconstruction engagement: Have E&I staff involved in projects that are first being developed to focus on inclusion and equity at the outset. This will require organizational commitment at the senior level.