Local businesses underrepresented in city contract awards

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By Rebecca Bowe

At Monday’s Land Use and Economic Development Committee hearing, Human Rights Commission Executive Director Chris Iglesias reported on how many locally owned San Francisco businesses benefit from city-issued contracts. The Guardian spotlighted this issue recently.

Across the board, the data showed, most city contracts are awarded to outside firms. (One speaker referred to them as “the Halliburtons of the world.”) The number of prime contracts and subcontracts awarded to non-local businesses was disproportionately higher than those awarded to local businesses, minority-owned businesses, or women-owned businesses, the data showed. Between September of 2006 and December of 2008, Iglesias noted, 35 percent of all city contracts went to certified local business enterprises.

In terms of city departments, Public Works led the way by awarding some 48 percent of its contracts to local firms. The airport issued just 10 percent of its contracts to local businesses, the port contributed 22 percent, and the Public Utilities Commission awarded 34 percent. Citywide, just 9 percent of term-contract awards and 7 percent of blanket-purchase orders were made through local firms.

Board of Supervisors President David Chiu, who formerly served on the city’s Small Business Commission, was less than thrilled by the findings.

“This is very troubling data to me,” he noted, and went on to say that if the city made a more concerted effort to invest in local, minority-owned and women-owned businesses, the effect “could act as our own local economic stimulus plan.”

The Administrative Code requires the HRC to submit regular reports to the Board of Supervisors regarding the city’s progress in making contracts available to locally owned, minority-owned or women-owned businesses as a means of preventing discrimination. Despite the rule, today marked the first time in two and a half years that data was reported. Iglesias called it a “revitalization of this reporting process” and committed to issuing reports in a timely manner from now on.

For his part, Chiu regarded the data as a road map for the work that lies ahead. “We have within our power the ability to invest locally,” he said, “and we are not doing that.”