The State of Minority- and Women- Owned ... - Cleveland.com

M/WBE Utilization and Disparity in City of Cleveland Contracting Activity
awarded 13.14 percent and paid 13.77 percent of contract and subcontract dollars on non-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, Hispanics, Asians/Pacific Islanders, and Native
Americans (see Tables 7.11 and 7.12).
Overall and in Construction, M/WBE utilization is significantly higher in major procurements
than in non-major procurements, reflecting in part the positive impact of CBS/MBE/FBE goals.
Overall M/WBE utilization on non-major procurements was 13.14 percent of award dollars
compared to 19.69 percent for major procurements. In Construction, M/WBE utilization on nonmajor
procurements was 10.88 percent of award dollars compared to 22.25 percent for major
procurements.
Tables 7.13 through 7.20 examine M/WBE utilization on major and non-major procurements for
the time periods before and after the most recent revisions to the City Chapter 187 that went into
effect on June 3, 2008. Those revisions established the CSB Program and eliminated MBE and
FBE goals on all but vertical construction projects. Prior to the current revisions to Chapter 187
of the Codified Ordinances of Cleveland, MBE goals ranged from 15 to 30 percent and FBE
goals ranged from 5 to 20 percent. Under the current Chapter 187, the goals for horizontal
construction are 30 percent CSB. The goals for vertical construction are 15 percent MBE, 7
percent FBE, and 8 percent CSB. The goals for professional services are 10 percent CSB, and the
goals for other contracts are 20 percent CSB. 305
Overall, M/WBE utilization has increased somewhat in the period since June 3, 2008. For major
procurements, M/WBE utilization was 18.64 percent of award dollars and 18.97 percent of paid
dollars prior to June 3, 2008 and 20.98 percent and 19.66 percent, respectively, subsequent to
June 3, 2008 (Comparing Tables 7.13 and 7.14 to Tables 7.15 and 7.16). For non-major
procurements, M/WBE utilization was 11.49 percent of award dollars and 11.88 percent of paid
dollars prior to June 3, 2008 and 14.39 percent and 15.68 percent, respectively, subsequent to
June 3, 2008 (Comparing Tables 7.17 and 7.18 to Tables 7.19 and 7.20).
In conclusion, we find evidence that M/WBE utilization is significantly higher in Construction,
AE-CRS, and Services—categories with significant scope for the use of subcontracting goals—
than it is in Commodities, where subcontract opportunities are limited or non-existent. Moreover,
we find evidence that M/WBE utilization in Construction and Overall is significantly higher on
major procurements—where the City’s Ordinance 187 is directed—than on non-major
procurements. Finally, we find evidence that, on balance, the revisions to Ordinance 187 that
went into effect in June 2008 have had a positive impact on M/WBE utilization.
305 It should be noted that most certified CSBs are also certified MBEs or FBEs. According to the City’s registry of
certified firms from October 2010, 85.0 percent of certified CSBs were also certified as MBEs or FBEs. This
percentage appears to be trending downward, however. According to the City’s current registry of certified firms
(accessed 6 August 2012), 80.9 percent of certified CSBs are also certified as MBEs or FBEs.
NERA Economic Consulting 240