The City Council last year approved a law that says socially and economically disadvantaged businesses, especially those in flood-damaged areas, should receive 35 percent of all public spending. But several small-business owners, most of them African-American and women entrepreneurs, told advisers to Mayor-elect Mitch Landrieu on Wednesday that they've been left out. Though many applauded city policies requiring a...
The City Council last year approved a law that says socially and economically disadvantaged businesses, especially those in flood-damaged areas, should receive 35 percent of all public spending.
But several small-business owners, most of them African-American and women entrepreneurs, told advisers to Mayor-elect Mitch Landrieu on Wednesday that they've been left out.
Though many applauded city policies requiring a set percentage of public deals to be subcontracted to firms enrolled in City Hall's "disadvantaged business enterprise" program, they complained that the effort -- intended to cultivate companies in historically disenfranchised communities -- isn't well executed.
Task force co-chairman Jay Lapeyre said making disadvantaged business enterprise programs more effective has been a central theme of the task force's work. Among the key problems are expensive requirements, such as securing performance bonds and insurance obligations, which can be costly for start-up construction firms, participants told members of Landrieu's task force on city contracting policies. The group is one of 17 citizen committees crafting policy recommendations in advance of the May 3 inauguration.
"Our contractors are dying on the vine," said Al Tharpe, manager of New Orleans Contractors Technology Center. "So my words to the new mayor would be that we need a concrete commitment. ... They need financial assistance, they need bonding, they need technical assistance.
"They're the best craftsmen in the world," he added, "but they sometimes need help with the paperwork."
Norman Roussell, executive director of the Capital Access Project Inc., called it a dilemma of "circular reasoning."
"I can do work, if given the contract," he said, playing the role of a small contractor. "If I got the contract, I could earn more money. If I had more money, I could afford insurance and bonding. If I had the insurance and bonding, I could get the contract."
Eugene Green Jr., a former city economic development chief, asked task force members to consider waiving bonding requirements on subcontracts of less than $500,000. City vendors usually are required to post a performance bond that protects the city against a loss in case the contractor doesn't complete the job adequately.
Tharpe advised that city officials could encourage prime vendors to parcel out work in bites small enough that insurance and bond costs would be affordable to small subcontractors.
Jonathan Temple, a New Orleans-based business development consultant with the U.S. Department of Commerce's Minority Business Development Agency, recommended a $2 million annual budget for the DBE program, in part for seminars to help new business owners navigate the public bid process.
Temple also said City Hall could leverage federal grants to create a city-backed performance bond fund.
Landrieu might smooth obstacles simply by stating strongly that he expects current city policies to be followed, said Damian Randolph, the manager of Uptown-based Service Plus Contracting.
"We can't be sitting before contractors who think that some of these things are just voluntary, that if they feel like it, then they will" meet DBE thresholds, he said.
Task force co-chairman Jay Lapeyre said making DBE programs more effective has been a central theme of the task force's work.
Its other main thrust has been crafting recommendations for a professional-services procurement process with "transparent, understandable, clear criteria and ... that takes the personal relationships out of the process as much as possible," he said.
Recent efforts to alter the way the city awards professional-services deals, which under state law don't have to be awarded to the lowest bidder, have met with some resistance.
While the City Charter gives singular authority to dole out the deals in areas such as engineering and legal work, reformers say opening the competitive procurement process to the public and relying on experts to review proposals would increase the chance that the most qualified applicant will be hired, rather than the one with the tightest political connections.
Opponents worry that any new system also would be prone to patronage and may eliminate even the modicum of opportunity that the current process have provided to minority-owned companies that were once shut out of city business and still struggle to compete in the open market.
Michelle Krupa can be reached at mkrupa@timespicayune.com or 504.826.3312.