Vendors who fail to comply with City Hall’s minority contracting goals now risk having their contracts terminated or payments withheld under a new ordinance approved by the New Orleans City Council and signed by Mayor Mitch Landrieu on Thursday.
The city has a goal of 35 percent participation with disadvantaged business enterprises, or DBE, for publicly financed projects and private projects that use public funding or incentives. Previously, the city simply asked contractors to endeavor to reach that goal.
Now, the city must use a specific order to define and track compliance.
“We now have an ordinance that has teeth in it,” Landrieu said in a news conference following the council vote. The ordinance ensures that “everybody who does business with the city of New Orleans is in compliance or you will not do business with us,” Landrieu said.
Under the new rule, individuals or companies seeking contracts with the city have to submit to a set of standards and criteria for evaluation of DBE participation.
The standards and criteria won’t be established until the end of the year, said Aimee Quirk, Landrieu’s economic development advisor, but could include requiring those seeking contracts to use “reasonable and available means” to find qualifying business, to provide the city with information about the disadvantaged businesses they intend to use, and to negotiate in good faith with those firms.
The onus also now is on City Hall to determine how its vendors will be evaluated and tracked and to ensure that disadvantaged businesses are paid promptly.
A disadvantaged business enterprise is a person or company certified as socially or economically disadvantaged through one or more certification programs designated by the city, according to the ordinance.
The designation commonly refers to minority- and women-owned businesses.
The ordinance also calls on the city to create and maintain a publicly accessible database of DBE certified individuals and businesses.
The City Council will receive a report on compliance with the program once a year.
“It’s not just about a piece of paper and an ordinance,” Councilwoman LaToya Cantrell said. “It’s about compliance.”
The ordinance applies to contracts with all city departments, agencies, corporations and boards that use public money or incentives, including tax credits. That includes the New Orleans Redevelopment Authority, in cases where it disposes of 25 or more residential properties in connection with a program funded by the city.
The council passed the measure unanimously to cheers, whistles and a standing ovation from observers who waited in council chambers for more than three hours for the result.
The Mayor’s Office introduced the ordinance earlier this month as a major step in its ongoing effort to rework the disadvantaged business program.
Thirty-four percent of the value of all city contracts went to disadvantaged businesses last year, up from 16 percent in 2010, Arkebia Matthews, director of the mayor’s Office of Supplier Diversity, told the City Council’s Economic Development Committee last week.
Matthews said her department has doubled the number of disadvantaged businesses registered with the city to 600 and shortened the certification process to 45 days from a year.