Dive Brief:
- The Chicago City Council Budget Committee has approved a revised five-year construction set-aside ordinance, with a minority-owned business set-aside of 26% — up from 24% — and a woman-owned business set-aside of 6% — up from 4%.
- Those new percentages are the highest in the program's history, Women Construction Owners and Executives Spokesperson Mary Kay Minaghan told the Chicago Sun-Times.
- Council members and city officials said the percentages are high enough to satisfy disadvantaged businesses but still realistic enough to pass legal challenges. Some changes were made to the program, including making who is automatically considered a presumptively socially disadvantaged group to no longer include Asian-Americans.
Dive Insight:
The updated ordinance also includes a five-year sunset provision and an economic cap of $750,000 for personal net worth. In addition, a "Target Market" program that lets minorities compete with each other for the role of prime contractor was revised to include all small businesses, including those owned by whites.
It is widely believed that Mayor Rahm Emanuel approved the previously stalled plan in an effort to placate the African-American community in the wake of his handling of the release of the Laquan McDonald shooting video, according to the Sun-Times.
"There’s more of us to do the work and we should have the opportunity. This isn’t a giveaway to anybody," Minaghan told the Sun-Times. "We have to bid this work just like anybody else. Our numbers have to be low to be utilized, but we want the opportunity to actually be invited to the table. Without this program, we’re never invited to the table."
State and federal agencies typically set their minority participation goals at 5%-10% and up, which translates to a potential payoff of billions of dollars for qualified firms. However, there is a widely acknowledged shortage of qualified minority-owned firms.