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M/WBE Utilization and Disparity in City of Cleveland Contracting Activity
dollars in AE-CRS; awarded 24.50 percent and paid 26.01 percent of contract and subcontract
dollars in Services; and awarded 7.77 percent and paid 6.63 percent of contract and subcontract
dollars in Commodities. Altogether, M/WBEs were awarded 19.29 percent and paid 18.99
percent of all locally-funded contract and subcontract dollars during the study period. Among
M/WBEs, firms owned by African Americans earned the largest fraction of contracting and
subcontracting dollars, followed in descending order by firms owned by nonminority females,
Asians/Pacific Islanders, Hispanics, and Native Americans (see Tables 7.5 and 7.6).
It is evident from Tables 7.1 through 7.6 that M/WBE participation is far lower in the
Commodities category, where subcontracting opportunities are practically nonexistent, than in
the other three categories, where subcontracting goals can be used to facilitate increased M/WBE
participation. When M/WBE participation in prime contracting is examined, therefore, it tends to
be far lower than when subcontract opportunities are included. This is true for the other three
procurement categories as well as in Commodities. Restricting the data to prime contracts, we
found that M/WBEs were awarded 6.63 percent and paid 6.65 percent of prime contract dollars
in construction; awarded 19.08 percent and paid 19.78 percent of prime contract dollars in AE-
CRS; awarded 13.06 percent and paid 14.28 percent of prime contract dollars in Services; and
7.07 7.77 percent and paid 5.74 percent of prime contract dollars in Commodities. Altogether,
M/WBEs were awarded 8.67 percent and paid 8.52 percent of prime contract dollars during the
study period. Among M/WBEs, firms owned by African Americans earned the largest fraction of
contracting and subcontracting dollars, followed in descending order by firms owned by
nonminority females, Asians/Pacific Islanders, and Hispanics. Native American participation
was virtually non-existent (see Tables 7.7 and 7.8).
Tables 7.9 through 7.12 examine M/WBE utilization on major procurements and non-major
procurements. Prior to 2010 the City’s threshold for major procurements (i.e. contracts that must
be approved by the Board of Control before award) was $10,000. In 2010, that threshold was
increased to $50,000. According to the City’s Office of Equal Opportunity, CSB/MBE/FBE
goals are applied only to major procurements.
For major procurements, we found that M/WBEs were awarded 22.25 percent and paid 21.68
percent of contract and subcontract dollars in construction; awarded 32.19 percent and paid
30.58 percent of contract and subcontract dollars in AE-CRS; awarded 24.43 percent and paid
25.76 percent of contract and subcontract dollars in Services; and awarded 7.85 percent and paid
6.54 percent of contract and subcontract dollars in Commodities. Altogether, M/WBEs were
awarded 19.69 percent and paid 19.22 percent of contract and subcontract dollars on major
procurements during the study period. Among M/WBEs, firms owned by African Americans
earned the largest fraction of contracting and subcontracting dollars, followed in descending
order by firms owned by nonminority females, Asians/Pacific Islanders, Hispanics, and Native
Americans (see Tables 7.9 and 7.10).
For non-major procurements, we found that M/WBEs were awarded 10.88 percent and paid
10.60 percent of contract and subcontract dollars in construction; awarded 34.15 percent and
paid 30.21 percent of contract and subcontract dollars in AE-CRS; awarded 25.61 percent and
paid 28.50 percent of contract and subcontract dollars in Services; and awarded 7.65 percent and
paid 8.35 percent of contract and subcontract dollars in Commodities. Altogether, M/WBEs were
NERA Economic Consulting 239