Controller Ron Galperin Wednesday recommended improvements to city programs that help small businesses and those owned by women, people of color and others earn contracts with the city of Los Angeles.
According to Galperin, Los Angeles spends billions of dollars in yearly contracting with private businesses for commodities, professional services and construction.
In his report, “Seizing the Opportunity to Advance City Contracting Equity,” Galperin said although 6,000 businesses are certified to contract with the city, only a “tiny fraction” of small businesses and companies owned by women and people of color end up doing business with Los Angeles.
“The movement for racial justice ignited a deep and necessary dialogue throughout this country and in Los Angeles over how to best confront systemic racism and prioritize greater inclusion,” Galperin said. “One of the many issues that must be addressed locally is the need for a more equitable environment for small businesses to contract with the city. More can and must be done to help private companies owned by women, people of color and others do meaningful business with Los Angeles.”
Los Angeles primarily connects small and disadvantaged businesses to contracting opportunities through its Business Inclusion Program, which requires companies competing for municipal contracts to reach out to certified businesses and make a good faith effort to develop more inclusionary subcontracting opportunities, Galperin said.
However, Galperin said the BIP is not as effective as it could be and the city’s procurement process makes it challenging to administer, and the data on disadvantaged business participation in contracting has never fully been analyzed. Without this, he said, the city cannot effectively remove barriers to more equitable and inclusive contracting.
Galperin recommended a series of changes, including:
— Identify or create a city department or working group with the resources and authority to enforce BIP requirements. Mayor Eric Garcetti’s recent appointment of Chief Equity Officer Brenda Shockley can assist in this endeavor;
— Establish a pilot program requiring small business participation in large city contracts;
— Redesign the outreach process to target small businesses, local businesses and businesses owned by women and people of color; and,
— Standardize data collection by city departments and publish the findings online.
The full report can be found at lacontroller.org/contractingequity or lacontroller.org/audits-and-reports/contractingequity/.