HomeMy WebLinkAbout2020/11/17-Attachments-City of Fort Worth Disparity Study 2020 - CHA FINAL.pdfFORTWORTH. , COLETTE
HALT
& ASSOCIATES
CITY OF FORT WORTH
DISPARITY STUDY
2020
CH Advisors, Inc.
16 Carriage Hills - San Antonio, TX 78257
433 West Briar Place #11C - Chicago, Illinois 60657
(773) 255-6844
colette.holt@mwbelaw.com
facebook.com/MWBELAW. twitter: @mwbelaw
O 2020 CH Advisors, Inc., All Rights Reserved.
About the Study Team
CH Advisors Inc. ("Advisors"), formerly known as Colette Holt & Associates, is a national
consulting firm specializing in issues related to Minority, Women, Disadvantaged and Small
Business Enterprise programs, supplier diversity initiatives, and affirmative action issues. The
firm has conducted court -approved disparity studies and designed court -approved programs for
over 25 years, including for numerous Texas governments. Advisors also provides training,
monitoring and investigative services across the country to agencies and businesses. Colette Holt,
the founding principal of both Colette Holt & Associates and CH Advisors, Inc., is also a frequent
expert witness, monitor and a media author and commentators. Advisors is led by Colette Holt,
J.D., a nationally recognized attorney and expert. In addition to Ms. Holt, the firm consists of
Steven C. Pitts, Ph. D., who serves as the team's economist and statistician; Ilene Grossman, B.S.,
Advisors Project Administrator; Glenn Sullivan, B.S., Advisors Director of Technology; Victoria
Farrell, MBA, Advisors Assistant Principal Researcher; and Joanne Lubart, J.D., Special Counsel.
Advisors is certified as a Disadvantaged Business Enterprise, Minority -Owned Business Enterprise
and a Woman -Owned Business Enterprise by numerous agencies.
Nervi' Strategic Solutions, LLC (MBE/SBE) strategically aligns disadvantaged, minority, women
and small companies to compete in today's challenging contracting industry in both the private
and public environments. President Pam Ervin -Davis has over 25 years of experience in supplier
diversity and has worked with partnerships of D/M/W/SBEs in all industries. Nervi' has also
teamed with Advisors on several disparity studies.
Acknowledgments
We wish to express special appreciation to Gwen Wilson, Patty J. Wilson, Robert Sturns, Christina
Brooks, Adrian Zavala and the staff at the City for their assistance in conducting this study.
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Table of Contents
I. Executive Summary ................................................ 1
A. Study Methodology and Data .................................................... 1
B. Legal Standards ................................................................ 1
C. City of Fort Worth's Business Diversity Enterprise Program ........................... 3
1. Experiences with the City's BIDE Program ................................................ 6
D. Utilization, Availability and Disparity Analyses ...................................... 7
E. Analysis of Economy -Wide Race and Gender Disparities in the City's Market ............ 14
F. Qualitative Evidence of Race and Gender Barriers in the City of Fort Worth's Overall
Market..................................................................... 15
G. Recommendations............................................................ 16
1. Enhance Race- and Gender -Neutral Measures ........................................... 17
2. Revise the Business Diversity Enterprise Program ........................................ 18
II. Legal Standards for Contracting Affirmative Action Programs ............ 23
A. Summary of Constitutional Equal Protection Standards .............................. 23
B. Elements of Strict Scrutiny...................................................... 26
C. Establishing a "Strong Basis in Evidence" for the City of Fort Worth's Minority- and Women -
Owned Business Enterprise Program ............................................ 30
1. Define the City of Fort Worth's Market Areas ............................................ 32
2. Examine Disparities between the City of Fort Worth's Utilization of M/WBEs and M/WBE
Availability.......................................................................32
3. Analyze Economy -Wide Evidence of Race- and Gender -Based Disparities ..................... 37
4. Evaluate Anecdotal Evidence of Race- and Gender -Based Barriers ........................... 38
D. Narrowly Tailoring a Minority -Owned and Women -Owned Business Enterprise Procurement
Program for the City of Fort Worth ............................................. 39
1. Consider Race- and Gender -Neutral Remedies ........................................... 40
2. Set Targeted M/WBE Goals...........................................................41
3. Ensure Flexibility of Goals and Requirements ............................................ 42
4. Review Program Eligibility Over -Inclusiveness and Under -Inclusiveness ...................... 43
5. Evaluate the Burden on Third Parties ................................................... 44
6. Examine the Duration and Review of the Program ........................................ 45
III. City of Fort Worth's Business Diversity Enterprise Program ............. 47
A. City of Fort Worth's Business Diversity Enterprise Program Provisions ................. 47
1. Administration of the City of Fort Worth's Business Diversity Enterprise Programs ............. 48
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2. Certification and Program Eligibility Requirements for Business Diversity Enterprise Programs ... 48
3. Business Diversity Enterprise Goal Setting and Program Elements ........................... 49
4. Capacity Building, Outreach Activities and Training ....................................... 52
5. Post Award Procedures and Contract Monitoring ......................................... 54
B. Experiences with the City of Fort Worth's Business Diversity Enterprise Program ........ 55
1. Outreach to M/WBEs and small firms .................................................. 55
2. Pre -award contract specifications, requirements and processes ............................ 56
3. Obtaining work through the program .................................................. 57
4. Payment.......................................................................... 58
5. Small business assistance initiatives.................................................... 59
6. Meeting M/WBE contract goals ....................................................... 60
C.Conclusion................................................................... 63
IV. Utilization, Availability and Disparity Analyses for the City of Fort Worth. . 65
A. Contract Data Overview........................................................ 65
B. The Product and Geographic Markets for the City of Fort Worth's Contracts ............ 66
1. The Unconstrained Product Market for the City's Contracts ................................ 66
2. The City of Fort Worth's Geographic Market ............................................. 67
3. The Utilization of M/WBEs on the City of Fort Worth's Contracts ............................ 68
4. The Availability of M/WBEs in the City of Fort Worth's Constrained Product Market............ 83
V. Analysis of Economy -Wide Disparities in the City of Fort Worth's
Markets.......................................................... 99
A. Introduction................................................................. 99
B. Disparate Treatment in the Marketplace: Evidence from the Census Bureau's 2014 - 2018
American Community Survey ................................................. 102
1. All Industries Combined in the Dallas Fort Worth Metropolitan Area ........................ 104
2. The Construction Industry in the Dallas Fort Worth Metropolitan Area ...................... 107
3. The Construction -Related Services Industry in the Dallas Fort Worth Metropolitan Area ....... 109
4. The Goods Industry in Dallas Fort Worth Metropolitan Area ............................... 111
5. The Services Industry in Dallas Fort Worth Metropolitan Area ............................. 113
6. The Information Technology Industry in the Dallas Fort Worth Metropolitan Area ............ 115
C. Disparate Treatment in the Marketplace: Evidence from the Census Bureau's 2012 Survey of
Business Owners............................................................ 117
1. All Industries ......................................................................119
2. Construction ......................................................................123
3. Construction -Related Services........................................................ 124
4. Goods ............................................................................125
5. Services ..........................................................................126
D. Evidence of Disparities in Access to Business Capital ............................... 126
E. Evidence of Disparities in Access to Human Capital ................................ 129
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VI. Qualitative Evidence of Race and Gender Barriers in the City of Fort Worth's
Market.......................................................... 131
A. Business Owner Interviews.................................................... 132
B. Conclusion .................................................................. 138
VII. Recommendations for the City of Fort Worth's Business Diversity
Program......................................................... 139
A. Enhance Race- and Gender -Neutral Measures .................................... 140
1. Implement Additional Features of the City's Electronic Contracting Data Collection and Monitoring
System......................................................................... 140
2. Increase Outreach to M/WBEs and Small Firms ......................................... 140
3. Increase Contract "Unbundling........................................................ 141
4. Review Requirements.............................................................. 141
5. Provide Training to City Staff......................................................... 141
B. Revise the Business Diversity Enterprise Program ................................. 142
1. Use the Study to Set the M/WBE Annual Goal .......................................... 143
2. Use the Study to Set Narrowly Tailored Contract Specific Goals ............................ 143
3. Count Certified Prime Vendors' Performance Towards Meeting Contract Goals .............. 145
4. Review Program Policies, Procedures and Forms ........................................ 146
5. Implement the Mentor -Protege Program .............................................. 146
C. Conduct Regular BIDE Program Reviews .......................................... 148
D. Develop Performance Measures for Program Success .............................. 148
Appendix A: Further Explanation of the Multiple Regression Analysis .................. 151
Appendix B: Further Explanation of the Probit Regression Analysis .................... 153
Appendix C: Significance Levels ................................................. 155
Appendix D: Additional Data from the Utilization Analyses for City of Fort Worth ........ 157
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List of Tables
Table 1-1: Industry Percentage Distribution of Contracts by Dollars .........................
8
All Contracts
Table 1-2: Distribution of Contracts in the City's Product Market ...........................
9
Table 1-3: Distribution of Contract Dollars by Race and Gender ............................
10
(share of total dollars)
Table 1-4: Aggregated Weighted Availability for the City's Contracts .......................
14
Table 1-5: Disparity Ratios by Demographic Group ......................................
14
Table 4-1: Industry Percentage Distribution of Contracts by Dollars ........................
66
All Contracts
Table 4-2: Distribution of Contracts in the City of Fort Worth's Geographical Market..........
68
Table 4-3: NAICS Code Distribution of Contract Dollars ...................................
69
Table 4-4: Distribution of Contract Dollars by Race and Gender ............................
74
(total dollars)
Table 4-5: Distribution of Contract Dollars by Race and Gender ............................
79
(share of total dollars)
Table 4-6: Unweighted Availability for the City of Fort Worth's Contracts ...................
85
Table 4-7: Share of the City Spending on the City of Fort Worth's Contracts .................
89
by NAICS Code
Table 4-8: Aggregated Weighted Availability for the City of Fort Worth's Contracts ...........
94
Table 4-9: Disparity Ratios by Demographic Group ......................................
94
Table 4-10: Hispanic Versus Non-M/WBE Outcomes in NAICS Code 541330 .................
95
(Engineering Services)
Table 4-11: Asian Versus Non-M/WBE Outcomes in NAICS Code 237310....................
96
(Highway, Street, and Bridge Construction)
Table 4-12: White Women Versus Non-M/WBE Outcomes in NAICS Code 541330 ............
97
(Engineering Services)
Table 5-1: Business Formation Rates .................................................
105
All Industries, 2014 - 2018
Table 5-2: Business Formation Probabilities Relative to White Males ......................
106
All Industries, 2014 - 2018
Table 5-3: Wage Differentials for Selected Groups Relative to White Men ..................
106
All Industries, 2014 - 2018
Table 5-4: Business Earnings Differentials for Selected Groups Relative to White Men........
107
All Industries
Table 5-5: Business Formation Rates .................................................
107
Construction, 2014 - 2018
Table 5-6: Business Formation Probability Differentials for Selected Groups ................
108
Relative to White Men, Construction, 2014 - 2018
Table 5-7: Wage Differentials for Selected Groups Relative to White Men ..................
108
Construction, 2014 - 2018
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Table 5-8: Business Earnings Differentials for Selected Groups Relative to White Men........
109
Construction, 2014 - 2018
Table 5-9: Business Formation Rates .................................................
109
Construction -Related Services, 2014 - 2018
Table 5-10: Business Formation Probability Differentials for Selected Groups ...............
110
Relative to White Men, Construction -Related Services, 2014 - 2018
Table 5-11: Wage Differentials for Selected Groups Relative to White Men .................
110
Construction -Related Services, 2014 - 2018
Table 5-12: Business Earnings Differentials for Selected Groups Relative to White Men.......
110
Construction -related Services, 2014 - 2018
Table 5-13: Business Formation Rates ................................................
111
Goods, 2014 - 2018
Table 5-14: Business Formation Probabilities Relative to White Males .....................
112
Goods, 2014 - 2018
Table 5-15: Wage Differentials for Selected Groups Relative to White Men .................
112
Goods, 2014 - 2018
Table 5-16: Business Earnings Differentials for Selected Groups Relative to White Men.......
113
Goods, 2014 - 2018
Table 5-17: Business Formation Rates................................................113
Services, 2014 - 2018
Table 5-18: Business Formation Probability Differentials for Selected Groups ...............
114
Relative to White Men, Services, 2014 - 2018
Table 5-19: Wage Differentials for Selected Groups Relative to White Men .................
114
Services, 2014 - 2018
Table 5-20: Business Earnings Differentials for Selected Groups Relative to White Men.......
115
Services, 2014 - 2018
Table 5-21: Business Formation Rates ................................................
115
Information Technology, 2014 - 2018
Table 5-22: Business Formation Probability Differentials for Selected Groups ...............
116
Relative to White Men, Information Technology, 2014 - 2018
Table 5-23: Wage Differentials for Selected Groups Relative to White Men .................
116
Information Technology, 2014 - 2018
Table 5-24: Business Earnings Differentials for Selected Groups Relative to White Men.......
117
Information Technology, 2014 - 2018
Table 5-25: 2-Digit NAICS Code Definition of Sector ....................................
119
Table 5-26: Percentage Demographic Distribution of Sales and Payroll Data ................
120
All Industries, 2012
Table 5-27: Demographic Distribution of Sales and Payroll Data —Aggregated Groups........
122
All Industries, 2012
Table 5-28: Disparity Ratios of Firm Utilization Measures ................................
123
All Industries, 2012
Table 5-29: Disparity Ratios —Aggregated Groups ......................................
123
Construction, 2012
Table 5-30: Disparity Ratios —Aggregated Groups ......................................
124
Professional, Scientific, and Technical Services, 2012
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City of Fort Worth Disparity Study 2020
Table 5-31: Disparity Ratios —Aggregated Groups ......................................
125
Goods, 2012
Table 5-32: Disparity Ratios —Aggregated Groups ......................................
126
Services, 2012
Table D-1: Industry Percentage Distribution of Contracts by Dollars Paid ...................
157
All Contracts
Table D-2: Industry Percentage Distribution of Contracts by Dollars Paid ...................
163
Prime Contracts
Table D-3: Industry Percentage Distribution of Contracts by Dollars Paid ...................
164
Subcontracts
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City of Fort Worth Disparity Study 2020
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I. EXECUTIVE SUMMARY
A. Study Methodology and Data
Colette Holt & Associates (CHA) was retained by the City of Fort Worth ("the City")
to perform a study regarding its Business Diversity Enterprise ("BIDE") program for
Minority- and Women -Owned Business Enterprises ("M/WBEs). The methodology
for this study embodies the constitutional principles of City of Richmond v. Croson,
Fifth Circuit Court of Appeals case law and best practices for designing race- and
gender -conscious and small business contracting programs. The CHA approach has
been specifically upheld by the federal courts. It is also the approach developed by
Ms. Holt for the National Academy of Sciences that is now the recommended stan-
dard for designing legally defensible disparity studies.
We determined the City's utilization of M/WBEs during fiscal years 2013 through
2018; the availability of these firms as a percentage of all firms in the City's geo-
graphic and industry market areas; and any disparities between the City's utiliza-
tion of M/WBEs and M/WBE availability. We further analyzed disparities in the
wider Dallas -Fort Worth Metroplex economy, where affirmative action is rarely
practiced, to evaluate whether barriers continue to impede opportunities for
minorities and women when remedial intervention is not imposed. We further
gathered anecdotal and qualitative data about the experiences of minority- and
women -owned firms in obtaining City contracts and the associated contracts and
concession opportunities. We evaluated the City's programs for conformance with
constitutional standards, national best practices, and the M/WBE program regula-
tions.
Based on the results of these extensive analyses, we made recommendations for
the City's business diversity programs.
B. Legal Standards
To be effective, enforceable, and legally defensible, a race -based program for pub-
lic sector contracts, regardless of funding source, must meet the judicial test of
constitutional "strict scrutiny". Strict scrutiny is the highest level of judicial review.
Strict scrutiny analysis is comprised of two prongs:
The government must establish its "compelling interest" in remediating race dis-
crimination by current "strong evidence" of the persistence of discrimination.
Such evidence may consist of the entity's "passive participation" in a system of
racial exclusion. Any remedies adopted must be "narrowly tailored" to that dis-
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City of Fort Worth Disparity Study 2020
crimination; the program must be directed at the types and depth of discrimina-
tion identified.'
The compelling governmental interest prong has been met through two types of
proof:
1. Statistical evidence of the underutilization of minority- or women -owned
firms by the agency and/or throughout the agency's geographic and industry
market area compared to their availability in the market area. These are
disparity indices, comparable to the type of "disparate impact" analysis used
in employment discrimination cases.
2. Anecdotal evidence of race- or gender -based barriers to the full and fair
participation of minority and women firms in the market area or in seeking
contracts with the agency, comparable to the "disparate treatment" analysis
used in employment discrimination cases. Anecdotal data can consist of
interviews, surveys, public hearings, academic literature, judicial decisions,
legislative reports, and other information.
The narrow tailoring prong has been met by satisfying five factors to ensure that
the remedy "fits" the evidence:
1. The necessity of relief;
2. The efficacy of race -neutral remedies at overcoming identified
discrimination;
3. The flexibility and duration of the relief, including the availability of waiver
provisions;
4. The relationship of numerical goals to the relevant market; and
5. The impact of the relief on the rights of third parties.
The case law on the Disadvantaged Business Enterprise ("DBE") program for U.S.
Department of Transportation -assisted contracts should guide the City's. Whether
the program is called an M/WBE program or a DBE program or any other moniker,
the strict scrutiny test applies. 49 C.F.R. Part 26 has been upheld by every court,
and local programs for M/WBEs will be judged against this legal framework. We
note that programs for veterans, persons with disabilities, preferences based on
geographic location or truly race- and gender -neutral small business efforts are
not subject to strict scrutiny and no evidence comparable to the type of proof
required in a disparity study is needed to enact such initiatives.
It is well established that disparities between an agency's utilization of M/WBEs
and their availability in the relevant marketplace provide a sufficient basis for the
consideration of race- or gender -conscious remedies. Proof of the disparate
impacts of economic factors on M/WBEs and the disparate treatment of such
City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
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City of Fort Worth Disparity Study 2020
firms by actors critical to their success will meet strict scrutiny. Discrimination
must be shown using statistics and economic models to examine the effects of sys-
tems or markets on different groups, as well as by evidence of personal experi-
ences with discriminatory conduct, policies or systems. Specific evidence of
discrimination or its absence may be direct or circumstantial and should include
economic factors and opportunities in the private sector affecting the success of
M/WBEs.
C. City of Fort Worth's Business Diversity Enterprise
Program
The City of Fort Worth's Business Diversity Enterprise (BIDE) Ordinance governs
access to contracting and subcontracting opportunities on the City's locally funded
contracts. The BIDE Ordinance was adopted in 2011 to remedy the effects of past
underutilization of minority and women business enterprises in the Fort Worth
marketplace. A 2009 Availability and Disparity Study and previous similar studies
found disparities in the City's utilization of M/WBEs on contracts in the construc-
tion, goods and services and professional services industries.
The BIDE Ordinance outlines, in detail, the required business diversity initiatives for
locally funded contracts for construction, professional services, purchase agree-
ments and any other contracts that the City Council or City Manager determine to
be appropriate. The BIDE Ordinance includes provisions for the following: certifica-
tion requirements; program goal setting process (purchases over $50,000); pro-
gram criteria forjoint ventures; M/WBE Prime Contracts; Small Business
Enterprise (SBE) subcontracting; procurements less than $50,000; applicable con-
tracts; post award compliance; contract monitoring and reporting; exceptions and
waivers; program administration; sanctions and severability. The Ordinance does
not set an expiration date for the program but does require a review by the City
Council every five years to determine whether it remains necessary.
Fort Worth's M/WBE initiatives are administered by the Office of Business Diver-
sity, which reports to the newly formed Diversity and Inclusion Department under
the City Manager, Deputy City Manager and Assistant City Managers. It is the
responsibility of the City Manager to establish, implement and administer the reg-
ulations directed by the BIDE Ordinance. The Business Development Manager (or
designee) administers the overall and day-to-day implementation of the City's pro-
gram. A Minority and Women Business Enterprise Advisory Committee (the "M/
WBE-AC"), which is appointed by the City Council, serves in an advisory role to
review Availability and Disparity Study findings, help the City Manager in imple-
menting the program and to inform and make recommendations to the City Man-
ager and Council about program initiatives. The Minority and Women Business
Enterprise Advisory Committee is comprised of 18 members: one representative
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City of Fort Worth Disparity Study 2020
from each of the four Chambers of Commerce; six partner organizations that pro-
mote the utilization and growth of M/WBEs; one regional certification agency; two
community groups; and five internal City of Fort Worth Departments to serve the
City in an advisory capacity.
The City accepts certifications from the Dallas/Fort Worth Minority Development
Council, North Central Texas Regional Certification Agency, Texas Department of
Transportation and the Women's Business Council - Southwest. To qualify, a firm
must be located within the six -county marketplace, i.e., Tarrant, Dallas, Denton,
Johnson, Parker and Wise counties. A business may also qualify if it has a Signifi-
cant Business Presence within the marketplace, defined as a business whose Prin-
cipal Place of Business is outside the marketplace and whose location within the
marketplace has been verified to be in existence for a minimum of 24 months and
where at least 20% of the business' full-time and part-time employees are based.
The following contracting and subcontracting goals for M/WBEs are set by industry
category for projects with values greater than $50,000, based on the 2009 study:
• A 25 percent goal for MBE participation for construction contracts
• A 15 percent goal for African -American participation for professional
contracts
• A 25 percent goal for M/WBE participation for goods and non-professional
services
• A 15 percent SBE participation for architectural and engineering services
Individual subcontracting goals are set by the Office of Business Diversity.
In addition to the standard subcontracting options, projects designated as "Joint
Venture Preferred" receive an additional 20 points for bids that include at least
one M/WBE joint venture partner. To encourage M/WBEs to take on prime con-
tracting work, M/WBE proposers, for construction contracts valued up to
$100,000 and professional services and architectural and engineering contracts up
to $150,000, will receive additional evaluation points and may not subcontract
more than 49 percent to non-M/WBEs. The Small Business Enterprise Subcon-
tracting Program is race and gender neutral and allows the City to establish goals
on a contract -by -contract basis.
M/WBE and SBE utilization plans specifying how all elements of the work will be
performed and the goals will be met are required for all solicitation types,
although the timing of their submission varies based on the method of solicitation.
For all proposal types, if M/WBE or SBE participation information is not submitted
or a Good Faith Efforts ("GFE") explanation is not provided, the proposer will be
deemed to be non -responsive. All businesses must be certified either at the time
of bid or prior to recommendation of award to be counted towards the goal.
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City of Fort Worth Disoarity Study 2020
With the exception of some joint venture and Design Build contracts, the BIDE
Ordinance does not allow certified Prime firms to count their self -performance
towards subcontracting goals.
A waiver may be requested by the contracting department through the Office of
Business Diversity prior to the solicitation.
While there are no goal requirements for contracts valued at $50,000 or less, each
department with purchasing authority is encouraged to solicit three bids of which
two must be with M/WBEs for solicitations between $3,000 and $50,000 to com-
ply with the BIDE Ordinance.
To assist in increasing participation of MBEs, the City plans to roll out a Mentor
Protege Program for certified MBEs in construction or construction -related ser-
vices.
The City participates in a number of outreach events that include networking ses-
sions, luncheons, informational meetings, The Office of Business Diversity hosts bi-
monthly Vendor Informational Forums, quarterly certification workshops and
Requests for Proposals ("RFP"), Requests for Qualifications ("RFQ'), Invitations to
Bid ("ITB"), and Best Value Solicitation workshops. The City has a three-year part-
nership agreement with the Beck Group to host the Beck School of Construction in
Fort Worth, TX. Additionally, the City has advocacy partners that host events that
support business and economic development, of M/WBEs, such as the Dallas/Fort
Worth Minority Business Development Council, US Pan Asian American Chamber
of Commerce, Fort Worth Hispanic Chamber of Commerce, Fort Worth Metropoli-
tan Black Chamber of Commerce, Regional Black Contractors Association, and
Regional Hispanic Contractors Association.
There are several opportunities for staff training throughout the year. Staff train-
ing includes attendance at the American Contract Compliance Association's annual
National Training Institute and Airport Minority Advisory Council conference. Spe-
cial training is available from the Texas Unified Certification Program for the U.S.
Department of Transportation's Disadvantaged Business Enterprise program, as
well as by the City's vendor of its electronic data collection and monitoring system,
B2Gnow, Inc. Staff can also attend the Beck and Turner Schools of Construction
and training offered by other vendor groups.
To assist potential proposers and bidders, upcoming bids and requests can be
accessed through the Purchasing website, Star Telegram newspaper, City News
releases and email if the vendor is registered in the City's vendor database, as well
as through professional business and trade associations and campaigns. The
2. The Senior Contract Compliance Specialists ("CCSs") have obtained their Executive Certified Master Compliance Admin-
istrator (ECMCA) Certification from Morgan State University through ACCA. This certification is the highest and most rec-
ognized certification in the country and symbolizes that one is an expert in the field.
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City of Fort Worth Disparity Study 2020
B2Gnow system also sends advertisements and notifications to M/WBEs and SBEs
of prospective contracting opportunities.
The BIDE Ordinance sets forth a detailed process for monitoring, resolving and
escalating contract non-compliance during the term of the contract, as well any
requested changes in M/WBE or SBE participation. Any unjustified modification or
deletion of participation by an M/SBE shall be deemed as a material breach of con-
tract and may result in sanctions up to and including debarment. The City recently
installed the B2Gnow electronic data collection and monitoring system to track
payments.
If the Office of Business Diversity determines that a contractor is out of compli-
ance with MWBE or SBE contract utilization, the Office will notify the contracting
department and the contractor and attempt to resolve non-compliance through
reconciliation. If the non-compliance cannot be resolved at this step, then the
Business Development Manager, along with the contracting department, will sub-
mit written recommendations to the Legal Department. A finding of non-compli-
ance by the Legal Department will result in the imposition of sanctions.
1. Experiences with the City's BDE Program
To explore the impacts of race- and gender -neutral contracting policies and
procedures and the implementation of the City's BDBE program, we inter-
viewed 80 individuals about their experiences and solicited their suggestions
for changes.
Outreach to WWBEs and Small Firms: Many participants thought the City
could do more in addition to their current outreach efforts. This included out-
reach to specific industries such as engineering and construction, hosting more
events and having City staff with decision -making authority participate in the
outreach activities.
Pre -award Contract Specifications, Requirements and Processes: Insurance
requirements, large contract sizes and the long wait times between notice of
award and the notice to proceed were impediments to M/WBEs.
Obtaining Work Through the Program: M/WBEs reported that the program
was vital to obtaining work on contracts for which they can be counted
towards goals. However, the City's policy that the program only applies to sub-
contracting work hurts their ability to become prime contractors and grow
their firms. Many thought the City's adherence to the program and compliance
with all requirements was helpful in getting work with the City.
Payment: The City and prime vendors received high marks for timely pay-
ments. However, change orders are an issue because they lead to long delays
in payments. This is a problem particularly for small firms because they lack
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City of Fort Worth Disparity Study 2020
working capital to finance delays. It also places a burden on general contrac-
tors.
Small Business Assistance Initiatives: Some M/WBEs thought the City could do
more in making additional assistance available to help them with their busi-
nesses, such as how to estimate jobs, comply with City paperwork and effec-
tive marketing, etc. Another initiative receiving support was the Mentor -
Protege program.
Meeting WWBE Contract Goals: While not always easy, most prime firms
were able to meet M/WBE contract goals on City projects. However, smaller
majority contractors found compliance with the program requirements to be
burdensome and often challenging. Some raised questions about how the City
sets contract goals and whether the goals are reasonable and achievable.
Program Eligibility and the City's List of Certified Firms: Another issue that was
raised was the exclusion of White women from the program which was recom-
mended by the City's prior disparity study. In addition, several prime contrac-
tors reported that the City's list of certified firms that can be used to meet the
goal contains many firms that either do not do the type of work listed in the
directory or have even gone out of business.
Prequalification Requirements and Compliance Documentation: Another bar-
rier is the City's requirement that some sub trade firms must be prequalified to
work as subcontractors on City jobs. Some contractors also thought the quick
turnaround time for program compliance documentation was unreasonable.
D. Utilization, Availability and Disparity Analyses
CHA analyzed contract data for the years fiscal 2013 through 2018 for the City's
contracts. To conduct this analysis, we constructed all the fields necessary for our
analysis where they were missing in the City's contract records (e.g., industry type;
zip codes; NAICS codes of prime contractors and subcontractors; non -certified
subcontractor information, including payments, race, gender; etc.). The resulting
Final Contract Data File ("FCDF") for analysis contained 315 prime contracts, with a
total net paid amount of $658,947,162. Subcontractors received 1,841 contracts.
Prime contractors received $440,065,101 of the net paid amount; subcontractors
received $218,882,055 of the net paid amount.
The FCDF was used to determine the geographic and product markets for the anal-
yses, to estimate the utilization of M/WBEs. The FCDF was also used to calculate
M/WBE availability in the City's marketplace.
O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
The following Table presents the 15 NAICS codes that represented 90 percent of
the value of the FCDF used to define the unconstrained product market for the
City's contracts. Table D-1 in Appendix D lists all 132 NAICS codes.
Table 1-1: Industry Percentage Distribution of Contracts by Dollars
All Contracts
NAICS
NAICS Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
237310
Highway, Street, and Bridge Construction
31.3%
31.3%
Water and Sewer Line and Related Structures
237110
28 2%
59.5/ °
Construction
Commercial and Institutional Building
236220
7.7/0 o
67.3%
Construction
541330
Engineering Services
5.1%
72.4%
Specialized Freight (except Used Goods)
484220
2 8%
75.2/ °
Trucking, Local
Electrical Contractors and Other Wiring
238210
o
2.8/0
0
78.0/
Installation Contractors
Metal Service Centers and Other Metal
423510
1.9%
79.9%
Merchant Wholesalers
Other Heavy and Civil Engineering
237990
1 8%
81.7/ °
Construction
238910
Site Preparation Contractors
1.4%
83.2%
Plumbing, Heating, and Air -Conditioning
238220
1.4/0 o
84.6%
Contractors
423840
Industrial Supplies Merchant Wholesalers
1.3%
85.9%
Asphalt Paving Mixture and Block
324121
1.3%
87.1/ °
Manufacturing
561730
Landscaping Services
1.2%
88.3%
327320
Ready -Mix Concrete Manufacturing
1.1%
89.4%
Brick, Stone, and Related Construction
423320
1.1%
90.4%
Material Merchant Wholesalers
TOTAL00.0,
Source: CHA analysis of the City data.
To determine the relevant geographic market area, we applied the well accepted
standard of identifying the firm locations that account for at least 75 percent of
8 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
contract and subcontract dollar payments in the contract data file. Location was
determined by ZIP code and aggregated into counties as the geographic unit.
The State of Texas contained 97.3 percent of the contract dollars in this market.
Three counties —Tarrant, Dallas, and Johnson - capture 92.6 percent of the Texas
dollars (and 90.1 percent of the FCDF). Table 1-2 lists how these dollars were dis-
tributed across these three counties in Texas. Dallas, Tarrant, Dallas, and Johnson
Counties comprise the geographic market.
Table 1-2: Distribution of Contracts in the City's Product Market
a. The rest of the counties in Texas captured 7.4 percent of
the City's spending in the state.
Source: CHA analysis of the City data.
Having determined the City's product and geographic market area (and, therefore,
the agency's constrained product market), the next step was to determine the dol-
lar value of the City's utilization of M/WBEs3 as measured by payments to prime
firms and subcontractors and disaggregated by race and gender. The City had not
collected data for all non-M/WBE subcontractors, as well as other records critical
for the study. City staff worked hard to clean up the data and fill in missing infor-
mation. However, we still had to obtain missing data from prime vendors, a
lengthy process, as well as reconstruct other contract records, including research-
ing the race and gender ownership of subcontractors and assigning NAICS codes to
those firms.
Table 1-3 presents the distribution of contract dollars by all industry sectors. Chap-
ter IV provides detailed breakdowns of these results.
We use the term "M/WBEs" to include firms owned by racial or ethnic minorities and white females that are not certi-
fied as M/WBEs by an agency recognized by the City. This casts the "broad net" required by the courts, as discussed in
Chapter II.
0 2020 CH Advisors, Inc., All Rights Reserved. 9
City of Fort Worth Disparity Study 2020
Table 1-3: Distribution of Contract Dollars by Race and Gender
(share of total dollars)
NAICS
212312
Black
0.0%
Hispanic
0.0%
Asian
0.0%
Native
American
0.0%
White
Women
0.0%
M/WBE
0.0%
Non-
M/WBE
100.0%
Total
100.0%
212321
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
213112
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
221320
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
221330
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
236210
0.0%
14.4%
85.6%
0.0%
0.0%
100.0%
0.0%
100.0%
236220
0.7%
2.0%
0.0%
0.0%
14.1%
16.7%
83.3%
100.0%
237110
0.0%
3.6%
0.7%
0.0%
1.9%
6.3%
93.7%
100.0%
237120
0.0%
74.8%
0.0%
0.0%
0.2%
75.0%
25.0%
100.0%
237310
2.2%
4.2%
5.1%
0.0%
0.9%
12.4%
87.6%
100.0%
237990
0.8%
0.5%
5.1%
0.0%
0.0%
6.5%
93.5%
100.0%
238110
27.7%
47.6%
10.4%
0.0%
6.6%
92.3%
7.7%
100.0%
238120
1.0%
9.9%
0.0%
5.9%
9.6%
26.4%
73.6%
100.0%
238140
55.9%
10.7%
0.0%
0.0%
0.0%
66.6%
33.4%
100.0%
238150
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
238160
0.0%
56.9%
0.0%
0.0%
0.0%
56.9%
43.1%
100.0%
238190
0.0%
97.9%
0.0%
0.0%
0.3%
98.3%
1.7%
100.0%
238210
0.0%
9.2%
0.0%
0.0%
8.2%
17.3%
82.7%
100.0%
238220
8.5%
19.4%
0.0%
0.0%
3.5%
31.4%
68.6%
100.0%
238290
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
238310
0.0%
0.3%
0.0%
0.0%
9.9%
10.2%
89.8%
100.0%
238320
3.9%
32.0%
0.0%
0.0%
23.2%
59.1%
40.9%
100.0%
238330
0.0%
7.6%
0.0%
0.0%
14.4%
22.0%
78.0%
100.0%
238340
0.0%
0.5%
0.0%
0.0%
0.0%
0.5%
99.5%
100.0%
238350
5.7%
38.8%
0.0%
0.0%
7.1%
51.6%
48.4%
100.0%
238390
0.0%
0.0%
0.0%
0.0%
97.5%
97.5%
2.5%
100.0%
238910
5.2%
2.1%
0.6%
0.0%
55.5%
63.4%
36.6%
100.0%
238990
0.6%
31.6%
0.5%
0.0%
3.1%
35.8%
64.2%
100.0%
10 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
314999
Black
0.0%
Hispanic
0.0%
Asian
0.0%
Native
American
0.0%
White
Women
0.0%
M/WBE
0.0%
Non-
M/WBE
100.0%
Total
100.0%
316998
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
321114
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
323111
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
324110
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
324121
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
326122
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
327110
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
327320
0.0%
0.0%
0.0%
0.0%
80.7%
80.7%
19.3%
100.0%
327332
0.0%
31.4%
0.0%
0.0%
0.0%
31.4%
68.6%
100.0%
327410
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
331110
0.0%
0.0%
0.0%
0.0%
35.6%
35.6%
64.4%
100.0%
331210
0.0%
97.6%
0.0%
0.0%
0.0%
97.6%
2.4%
100.0%
331221
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
331511
0.0%
0.0%
0.0%
0.0%
0.6%
0.6%
99.4%
100.0%
332312
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
332618
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
332996
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
332999
0.0%
0.1%
0.0%
0.0%
46.1%
46.2%
53.8%
100.0%
333120
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
337215
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
339950
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
423320
0.0%
0.0%
0.1%
0.0%
70.0%
70.1%
29.9%
100.0%
423390
0.0%
2.8%
0.0%
0.0%
0.0%
2.8%
97.2%
100.0%
423440
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
423510
0.0%
3.9%
0.0%
0.0%
0.3%
4.2%
95.8%
100.0%
423610
0.0%
31.6%
0.0%
0.0%
40.3%
71.9%
28.1%
100.0%
423710
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
423720
0.0%
34.8%
0.0%
0.0%
0.0%
34.8%
65.2%
100.0%
423740
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
O 2020 CH Advisors, Inc., All Rights Reserved. 11
City of Fort Worth Disparity Study 2020
NAICS
423820
Black
0.0%
Hispanic
0.0%
Asian
0.0%
Native
American
0.0%
White
Women
0.0%
M/WBE
0.0%
Non-
M/WBE
100.0%
Total
100.0%
423840
3.9%
57.9%
0.0%
0.0%
6.8%
68.6%
31.4%
100.0%
424120
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
424590
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
424690
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
424710
0.0%
0.0%
0.0%
0.0%
67.0%
67.0%
33.1%
100.0%
424720
0.0%
0.0%
0.0%
0.0%
82.9%
82.9%
17.1%
100.0%
424950
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
444120
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
0.0%
100.0%
444190
0.0%
53.9%
0.0%
0.0%
0.0%
53.9%
46.2%
100.0%
453998
0.0%
0.0%
100.0%
0.0%
0.0%
100.0%
0.0%
100.0%
454310
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
484110
14.7%
84.4%
0.0%
0.0%
0.0%
99.1%
0.9%
100.0%
484121
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
484220
27.8%
65.6%
0.0%
0.0%
3.4%
96.8%
3.2%
100.0%
484230
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
488410
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
488999
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
517311
0.0%
5.0%
0.0%
0.0%
95.1%
100.0%
0.0%
100.0%
519110
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
524126
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
531320
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
531390
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
532412
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
532490
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
541191
0.0%
35.1%
0.0%
0.0%
65.0%
100.0%
0.0%
100.0%
541211
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541310
0.0%
0.0%
0.0%
0.0%
54.0%
54.0%
46.0%
100.0%
541320
18.3 %
0.0%
0.0%
0.0%
0.0%
18.3 %
81.7 %
100.0%
541330
0.6%
28.0%
5.3%
4.8%
8.0%
46.7%
53.3%
100.0%
12 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
541340
Black
0.0%
Hispanic
0.0%
Asian
0.0%
Native
American
0.0%
White
Women
100.0%
M/WBE
100.0%
Non-
M/WBE
0.0%
Total
100.0%
541350
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541370
0.0%
45.0%
0.0%
19.0%
28.1%
92.1%
7.9%
100.0%
541380
34.2%
7.7%
0.0%
0.0%
32.5%
74.4%
25.6%
100.0%
541420
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
541611
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541613
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
541620
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
541715
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541720
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541820
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
541990
8.0%
28.2%
0.0%
0.0%
63.8%
100.0%
0.0%
100.0%
561311
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
561320
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
561440
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
561499
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
561621
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
561720
54.9%
0.0%
35.8%
0.0%
9.4%
100.0%
0.0%
100.0%
561730
0.0%
88.7%
0.0%
0.0%
1.9%
90.6%
9.4%
100.0%
561790
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
561910
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
0.0%
100.0%
561990
0.5%
34.0%
0.0%
0.0%
45.5%
79.9%
20.1%
100.0%
562111
96.8%
0.0%
0.0%
0.0%
3.2%
100.0%
0.0%
100.0%
562910
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
562991
0.0%
44.0%
0.0%
0.0%
13.6%
57.6%
42.4%
100.0%
811310
Total
0.0%
2.4%
0.0%
0.0
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
00.0
Source: CHA analysis of the City data.
Using the "custom census" approach to estimating availability and the further
assignment of race and gender using the FCDF, the Master M/WBE Directory and
O 2020 CH Advisors, Inc., All Rights Reserved. 13
City of Fort Worth Disparity Study 2020
other sources, we determined the aggregated availability of M/WBEs, weighted by
the City's spending in its geographic and industry markets, to be 25.4 percent for
City contracts. Table 1-4 presents the weighted availability data for all product sec-
tors combined for the racial and gender categories.
Table 1-4: Aggregated Weighted Availability for the City's Contracts
Source: CHA analysis of the City data; Hoovers; CHA Master Directory.
To meet the strict scrutiny test that requires that all groups must have suffered
discrimination in the City's markets to be eligible for credit towards meeting M/
WBE contract goals, we next calculated disparity ratios comparing the City's utili-
zation of M/WBEs as prime contractors and subcontractors to the availability of
these firms in its market areas. Table 1-5 presents these results for City -funded
contracts.
Table 1-5: Disparity Ratios by Demographic Group
Source: CHA analysis of the City data; Hoovers; CHA Master Directory.
* Indicates substantive significance.
*Indicates statistical significance at the 0.05 level.
Because of the relatively high utilization of Hispanic, Asian and White women -
owned firms, we conducted further analysis of the utilization of these groups and
found that dollars were concentrated in a few NAICS codes that were a relatively
large portion of the City's spend during the study period. We therefore do not con-
clude that Hispanic, Asian and White women firms do not continue to need the
remedial intervention of contract goals.
E. Analysis of Economy -Wide Race and Gender
Disparities in the City's Market
We explored the Census Bureau data and literature relevant to how discrimination
in the City's industry market and throughout the wider Dallas -Fort Worth economy
affects the ability of minorities and women to fairly and fully engage in the City's
prime contract and subcontract opportunities.
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We analyzed the following data and literature:
Data from the Census Bureau's Survey of Business Owners. This set indicates
very large disparities between M/WBE firms and non-M/WBE firms when
examining the sales of all firms, the sales of employer firms (firms that employ
at least one worker), or the payroll of employer firms.
Data from the Census Bureau's American Community Survey ("ACS"). This set
indicates that Blacks, Hispanics and White women were underutilized relative
to White men. Controlling for other factors relevant to business outcomes,
wages and business earnings were lower for these groups compared to White
men. Data from the ACS further indicate that non -Whites and White women
are less likely to form businesses compared to similarly situated White men.
• The literature on barriers to access to commercial credit and the
development of human capital. This research reports that minorities continue
to face constraints on their entrepreneurial success based on race. These
constraints negatively impact the ability of firms to form, to grow, and to
succeed.
All three types of evidence have been found by the courts to be relevant and pro-
bative of whether a government will be a passive participant in overall market-
place discrimination without some type of affirmative intervention. Taken
together with anecdotal data, this is the type of proof that addresses whether, in
the absence of M/WBE contract goals, the City will be a passive participant in the
discriminatory systems found throughout its industry market.
F. Qualitative Evidence of Race and Gender Barriers in
the City of Fort Worth's Overall Market
In addition to quantitative data, the courts look to anecdotal evidence of firms'
marketplace experiences to evaluate whether the effects of current or past dis-
crimination continue to impede opportunities for M/WBEs, such that race -con-
scious measures are necessary to ensure a level playing field for all firms. To
explore this type of anecdotal evidence, we conducted two public informational
sessions, and small group business owner and stakeholder interviews in person
and by telephone. Eighty individuals participated in the small group interviews.
The following are brief summaries of the views expressed over the many sessions
by numerous participants.
• Many minority and female owners reported that they still suffer from biased
perceptions and stereotypes about their competency and professionalism.
While sometimes subtle, these biases color all aspects of their attempts to
obtain contracts and to be treated equally in performing contract work
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City of Fort Worth Disparity Study 2020
• Critical business and professional networks remain closed to many minority
and women entrepreneurs.
• Breaking into the network of Fort Worth vendors was especially difficult.
• Many women business owners experienced sexism and gender bias in the
business world that impedes their ability to flourish. Some women reported
that once they had proven themselves, sexist biases and assumptions were
overcome.
• Unequal access to business credit was cited as another obstacle to M/WBEs
obtaining City work.
• To overcome any race- and/or gender -based barriers, the vast majority of
minority and women owners and stakeholder representatives were adamant
that contract goals are necessary to ensure they have full and fair
opportunities to compete.
• The exclusion of White women from the City's program based on the
recommendations of an earlier disparity study has eliminated their
opportunities to work on City projects.
G. Recommendations
The quantitative and qualitative data presented in this Study provide a thorough
examination of the evidence regarding the experiences of minority- and women -
owned firms operating in the City of Fort Worth's geographic and procurement
markets. As required by strict scrutiny, we analyzed evidence of such firms' utiliza-
tion by the City as measured by dollars spent. We also examined business owners'
experiences in obtaining City contracts and associated subcontracts, and opportu-
nities in the private sector. We gathered statistical and anecdotal data to provide
the evidence necessary to determine whether there is a strong basis in evidence
that barriers to full and equal contracting opportunities exist on the basis of race
or gender in the City's market area that circumscribe City contract opportunities,
and if so, what narrowly tailored remedies are appropriate.
The Study results support the City's continuing compelling interest in implement-
ing its race- and gender -conscious Business Diversity Enterprise ("BDE") program.
The statistical data and the anecdotal testimony provide a sufficient basis for the
continued use of narrowly tailored remedial race- and gender -based measures to
ensure full and fair access by all firms to City prime contracting and associated sub-
contracting opportunities.
We therefore suggest enhancements to the City's existing measures and new ini-
tiatives to increase opportunities for M/WBEs and other small businesses. The fol-
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City of Fort Worth Disparity Study 2020
lowing recommendations seek to provide guidance to ensure the programs
conform to strict scrutiny and national best practices for M/WBE programs.
1. Enhance Race- and Gender -Neutral Measures
Implement Additional Features of the City's Electronic Contracting Data Collec-
tion and Monitoring System: Using its newly implemented B2Gnow electronic
data collection and monitoring system, the City should continue to refine its
data collection process to ensure that data entry is complete. This would
greatly assist the City administering the program and reduce the manual
manipulation of information in future studies.
In addition, the City should implement a contract/project-specific goal setting
module that is available as part of the current system. This will allow the City to
set narrowly tailored goals using the data from this study as a starting point.
This will not only tie the program's implementation to its evidentiary basis but
also increase consistency and transparency of the contract goal setting pro-
cess.
Another enhancement of the system's functionality would be to allow prime
vendors to submit verified subcontractor utilization plans online. This should
reduce the time for review of plans and the burdens of record keeping.
Increase Outreach to M/WBEs: The City currently participates in vendor fairs
and other outreach events hosted by local government agencies. While M/
WBEs and small firms found these to be somewhat useful, several business
owners suggested more meetings focusing on specific City projects or for spe-
cific industries, such as engineering services.
Increase Contract "Unbundling": The size and complexity of many of the City's
contracts are major impediments to M/WBEs and other small firms in obtain-
ing work as prime contractors and as subcontractors. "Unbundling" contracts
into smaller segments was endorsed by many firm owners as one method to
provide fair access to City projects. Reviewing specific procurement needs
through the lens of small businesses can lead to reduced barriers across many
City departments. In conjunction with reduced insurance and bonding require-
ments where possible, unbundled contracts would permit smaller firms to
move from quoting solely as subcontractors to bidding as prime contractors,
as well as enhance their subcontracting opportunities. Unbundling must be
conducted, however, within the constraints of the need to ensure efficiency
and limit costs to taxpayers, as well as any state law requirements.
Review Contract Requirements: The City should consider accepting equivalent
experience when evaluating bids or proposals that are not awarded solely on
the basis of price. This can include an individual's experience at an earlier firm,
such as an owner who has transitioned from employee to entrepreneur, or
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City of Fort Worth Disparity Study 2020
work performed on projects similar though not identical to the services sought
in the City's solicitation. The City should also examine its current prequalifica-
tion policies to review the criteria so that they are no more restrictive or bur-
densome than is absolutely necessary. It is also important to ensure that the
Office of Business Diversity is aware of those requirements so that certified
firms will not miss out on opportunities because of a lack of coordination
between City departments.
Provide Training to City Staff: Fort Worth has evinced a strong commitment to
diversity and inclusion and training is an important step in institutionalizing
these values. To actualize these commitments, training will be valuable to City
employees with responsibilities for contracting and procurement and vendor
interface on new initiatives. It is also an opportunity to again stress the impor-
tance of diversity and inclusion and ensure that the program is "owned" by all
departments, not just the Office of Business Diversity. In addition, the City
should consider providing unconscious or implicit bias training for all City
staff.4 Such training should raise awareness and understanding to work toward
making the City of Fort Worth a model of diversity and inclusion.
2. Revise the Business Diversity Enterprise Program
The study's results support the determination that the City has a strong basis
in evidence to implement race- and gender -conscious remedies. The record —
both quantitative and qualitative— establishes that M/WBEs in the City's mar-
ket area continue to experience significant disparities in their access to City
contracts and private sector opportunities and to those factors necessary for
business success. Even with the use of limited contract goals for only certain
groups (based on the prior Disparity Study), M/WBEs as a group have not
reached parity on City -funded jobs. The results for Black -owned and Native -
American -owned firms are particularly stark. Without the use of contract goals
to level the playing field, the City might function as a "passive participant" in
the "market failure" of discrimination.
Further, the economy -wide analyses in Chapter V reveal that in the overall
DFW Metroplex economy, where contracting equity programs are rare as a
portion of total economic activity, M/WBEs experience very large and signifi-
cant disparities to full and fair chances to entrepreneurial success. The data
show minorities and women form businesses at rates well below white men
and earn significantly less from the businesses they do form. They also experi-
ence large disparities in the ratios of their sales and their payrolls relative to
the number of their firms.
4. "Implicit bias" is attitudes and stereotypes that influence judgment, decision -making, and behavior in ways that are out-
side of conscious awareness and/or control. See https:Himplicit.harvard.edu.
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City of Fort Worth Disparity Study 2020
The anecdotal data also suggest that the playing field for City opportunities is
not yet level. Reports of inadequate access to information, biased perceptions,
entrenched and closed networks, lack of access to capital and bonding, restric-
tive experience requirements, and other impediments on the basis of, or exac-
erbated by, race and gender continue impede M/WBEs' success. While the
City's program has been successful in overcoming these barriers for some
members of groups in some industries, the experiences of most M/WBEs in
most industries as well as outside of contracting affirmative action programs
strongly suggests that flexible contract goals are still warranted. We therefore
recommend the continued implementation of a race- and gender -conscious
program and the inclusion of all groups for credit towards meeting contract
goals in all industries.
Use the Study to Set the WWBEAnnual Goal: The weighted availability esti-
mates in Chapter IV should be the basis for consideration of overall, annual
spending targets for City funds. We found the availability of M/WBEs to be
25.4 percent.
Use the Study to Set Narrowly Tailored Contract Specific Goals: The City's con-
stitutional responsibility is to ensure that goals are narrowly tailored to the
specifics of the project and to the geographic and procurement marketplace.
We therefore urge the City to jettison the current approach of a patchwork of
broad industry or category goals (i.e., construction, professional services, good
and services and architectural and engineering services) in favor of a constitu-
tionally defensible, narrowly tailored approach to contract goal setting. Not
only are these generic categories somewhat arbitrary but also by not reviewing
the actual scopes of work, the goal may well be inapposite to the actual work
performed.
Goals should be set not only for subcontracting tasks but for the entire scope
of work of the project. Not only is there no legal requirement to constrict the
program in this manner but also it is prime work that is the most difficult for
M/WBEs to achieve. A "subcontracting" only contract goal locks in the very
barriers sought to be overcome because it forces M/WBE prime contractors to
subcontract out work they could self -perform and thereby grow their skills and
revenues. This will also simplify and bolster the legality of the administration of
the program, by eliminating extra points that are sometimes given to certified
firms that depend on the form of their contractual relationships with other
parties (e.g., joint venture agreements versus subcontracting agreements).
The highly detailed availability estimates in Chapter IV can serve as the starting
point for narrowly tailored contract goal setting that reflects the percentage of
available M/WBEs to perform the specific scopes of work of the contract as a
percentage of the total pool of available firms. To facilitate the process, the
City should use the B2GNow electronic data collection and monitoring sys-
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City of Fort Worth Disparity Study 2020
tem's contract goal setting module as a starting point for goal setting. We have
worked extensively with this firm to develop a simple, defensible methodology
that uses the study data. The unweighted availability estimates should be
weighted by the expected scopes of the particular contract, including the
prime vendor's anticipated self -performance. The City should then review the
results in light of other factors, such as the entry of new firms into the pro-
gram, other current Fort Worth area projects that may impact availability,
progress towards meeting the annual goals, any unique aspects to the scopes,
or other relevant factors. Any adjustment to the calculated goal should be fully
documented. Written policies explaining the contract goal setting steps should
be disseminated so that all contracting actors understand the methodology.
We further suggest that the City no longer give evaluation "points" to M/WBEs
who submit qualifications -based proposals and permit certified firms to count
their own participation towards meeting the contract goal as recommended
below. This inflexible remedy may run afoul of the court -imposed requirement
that a proposer making good faith efforts to meet the goal be treated the
same way as one that might meet the goal, since only minority or women firms
can receive these points.
In addition, the City should consider bidding some contracts that it determines
have significant opportunity for M/WBE participation without goals. These
"control contracts" can illuminate whether certified firms are used or even
solicited in the absence of goals. The development of some "unremediated"
markets data (i.e., contracts without goals), as held by the courts, will be pro-
bative of whether the M/WBE utilization is the result of the City's program or
whether barriers on the basis of race or gender have been eliminated.
Count Certified Prime Vendors' Performance Towards Meeting Contract Gools:
The City should consider following national trends and rescind the prohibition
on certified prime M/WBEs counting their own participation towards contract
goals. This will accomplish several objectives. First, it is one of the few reme-
dies available to remove barriers to the participation of minorities and women
as prime firms, as set -asides on the basis of race or gender are unlikely to sur-
vive judicial scrutiny. Next, it supports the creation of additional capacity in
these firms, so that when they graduate from the program, they do not lose
most (or even all) of their work because they can no longer be counted by
other prime businesses towards meeting contract goals. Third, it clarifies that
all contract dollars will be subject to the goal, notjust the dollars anticipated to
be spent with subcontractors. Finally, it more closely mirrors the way many
industries function outside the operations of contracting affirmative action
programs. Permitting certified prime firms to count their own participation
gives them the ability to grow within the usual parameters of their industries.
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City of Fort Worth Disparity Study 2020
Review Program Policies, Procedures and Forms: To implement the new goals
and contract goal setting methodology, the City should review all its current
program components, including policies, procedures and forms. We suggest
the following program elements, at minimum, be revised to reflect the findings
in this Report and national best practices for M/WBE programs. These include:
• Specification development that encompasses input of the Office of
Business Diversity staff in development of solicitations.
• Special provisions and instructions to bidders about the program to
ensure that changes are clear, and standards and requirements are fully
spelled out, including the types of sanctions that may be imposed for non-
compliance or contract breach.
• Definitions for "commercially useful function" and how M/WBE
participation will be counted towards credit for meeting contract goals.
• Criteria for establishing the "good faith efforts" of bidders who are unable
to meet the goal. Standards for such "waivers" must be clear, with a fully
delineated process to appeal adverse determinations.
• Standards for contract performance, including substituting non-
performing certified firms; reporting compliance; and seeking assistance
from the BIDE Office.
• Contract closeout procedures and standards for determining that the
contractor has met its affirmative action obligations.
Implement the Mentor -Protege Program: Fort Worth has drafted new Mentor -
Protege initiative that has not yet been implemented. In addition to the pro-
posed elements, we suggest adding some aspects of the model developed for
the U.S. Department of Transportation's Disadvantaged Business Enterprise
program. These elements provide support for M/WBEs while incentivizing the
mentor to provide the types of assistance that produce identified and achiev-
able goals.
Conduct Regular BDE Program Reviews: The City should conduct a full and
thorough review of the evidentiary basis for the Program approximately every
five to seven years to meet the requirements of strict constitutional scrutiny
and ensure best practices in program administration. A sunset date for the
BIDE program, when it will end unless reauthorized, is a constitutional require-
ment to meet the narrow tailoring test that race -and gender -conscious mea-
sures be used only when necessary. A new disparity study or other applicable
research should be commissioned in time to meet the sunset date.
Develop Performance Measures for Program Success: The City should develop
quantitative performance measures for certified firms and the overall success
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City of Fort Worth Disparity Study 2020
of the program to evaluate its effectiveness in reducing the systemic barriers
identified by the study. In addition to meeting the annual goal(s), possible
benchmarks might include, the number of bids or proposals and the dollar
amount of the awards, the goal shortfall where the bidder submitted good
faith efforts to meet the contract goal; the number and dollar amount of bids
or proposals rejected as non -responsive for failure to make good faith efforts
to meet the goal; the number, type, and dollar amount of M/WBE substitu-
tions during contract performance; increased bidding by certified firms;
increased prime contract awards to certified firms; and increased "capacity" of
certified firms as measured by bonding limits such as size of jobs or profitabil-
ity.
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II. LEGAL STANDARDS FOR
CONTRACTING AFFIRMATIVE
ACTION PROGRAMS
A. Summary of Constitutional Equal Protection
Standards
To be effective, enforceable, and legally defensible, a race -based affirmative
action program for public sector contracts, regardless of funding source, must
meet the judicial test of constitutional "strict scrutiny'. Strict scrutiny is the high-
est level of judicial review. Strict scrutiny analysis is comprised of two prongs:
1. The government must establish its "compelling interest" in remediating race
discrimination by current "strong evidence" of the persistence of
discrimination. Such evidence may consist of the entity's "passive
participation" in a system of racial exclusion.
2. Any remedies adopted must be "narrowly tailored" to that discrimination; the
program must be directed at the types and depth of discrimination
identified.5
The compelling governmental interest prong has been met through two types of
proof:
Statistical evidence of the underutilization of minority or women firms by the
agency and/or throughout the agency's geographic and industry market area
compared to their availability in the market area. These are disparity indices,
comparable to the type of "disparate impact" analysis used in employment
discrimination cases.
Anecdotal evidence of race- or gender -based barriers to the full and fair
participation of minority- and women -owned firms in the market area or in
seeking contracts with the agency, comparable to the "disparate treatment"
analysis used in employment discrimination cases.6 Anecdotal data can
consist of interviews, surveys, public hearings, academic literature, judicial
decisions, legislative reports, and other information.
5. City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
6. Id. at 509.
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City of Fort Worth Disparity Study 2020
The narrow tailoring prong has been met by satisfying five factors to ensure that
the remedy "fits" the evidence:
1. The necessity of relief;
2. The efficacy of race -neutral remedies at overcoming identified
discrimination;
3. The flexibility and duration of the relief, including the availability of waiver
provisions;
4. The relationship of numerical goals to the relevant market; and
5. The impact of the relief on the rights of third parties.
In Adorond v. Peno,7 the United States Supreme Court extended the analysis of
strict scrutiny to race -based federal enactments such as the United States Depart-
ment of Transportation ("USDOT") Disadvantaged Business Enterprise ("DBE")
program for federally assisted transportation contracts.
State and local governments, must have a compelling governmental interest for
the use of race, and the remedies adopted must be narrowly tailored to that evi-
dence.8
Most federal courts, including the Fifth Circuit,9 have subjected preferences for
Women -Owned Business Enterprises ("WBEs") to "intermediate scrutiny'. Gen-
der -based classifications must be supported by an "exceedingly persuasive justifi-
cation" and be "substantially related to the objective".10 However, appellate
courts have applied strict scrutiny to the gender -based presumption of social dis-
advantage in reviewing the constitutionality of the DBE program11 or held that the
results would be the same under strict scrutiny.12
Classifications not based upon a suspect class (race, ethnicity, religion, national
origin or gender) are subject to the lesser standard of review called "rational basis"
scrutiny.13 The courts have held there are no equal protection implications under
the Fourteenth Amendment of the United States Constitution for groups not sub-
ject to systemic discrimination.14 In contrast to strict scrutiny and to intermediate
7. Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995) ("Adorond III").
8. See, for example, Croson, 488 U.S. at 492-493; Adarand III, 515 U.S. 200, 227; see generally Fisher v. University of Texas,
133 S. Ct. 2411 (2013).
9. W.H. Scott Construction Co., Inc., v. City of Jackson, Mississippi, 199 F.3d 206, 215 n.9 (5th Cir. 1999).
10. Cf.. United States v. Virginia, 518 U.S. 515, 532 n.6 (1996).
11. Northern Contracting, Inc. v Illinois Department of Transportation, 473 F.3d 715, 720 (71h Cir. 2007), cert. denied 15-
1827, June 26, 2017 ("Northern Contracting III").
12. Western States Paving Co., Inc. v. Washington Department of Transportation, 407 F.3d 983 (9th Cir. 2005), cert. denied,
546 U.S. 1170 (2006).
13. See, generally, Coral Construction Co v. King County, 941 F. 2d 910 (9th Cir. 1991); Equal. Found. v. City of Cincinnati, 128
F. 3d 289 (6th Cir. 1997).
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City of Fort Worth Disparity Study 2020
scrutiny, rational basis means the governmental action must be "rationally
related" to a "legitimate" government interest.15 Thus, preferences for persons
with disabilities or veteran status may be enacted with vastly less evidence than
that required for race- or gender -based measures to combat historic discrimina-
tion.16
Unlike most legal challenges, the defendant bears the initial burden of producing
"strong evidence" in support of its race -conscious program.17 As held by the Fifth
Circuit, the plaintiff must then proffer evidence to rebut the government's case,
and bears the ultimate burden of production and persuasion that the affirmative
action program is unconstitutiona1.18 "[W]hen the proponent of an affirmative
action plan produces sufficient evidence to support an inference of discrimination,
the plaintiff must rebut that inference in order to prevail."19
A plaintiff "cannot meet its burden of proof through conjecture and unsupported
criticism of [the government's] evidence."20 To successfully rebut the govern-
ment's evidence, a plaintiff must introduce "credible, particularized evidence" that
rebuts the government's showing of a strong basis in evidence.21 For example, in
the challenge to the Minnesota and Nebraska DBE programs, "plaintiffs presented
evidence that the data was susceptible to multiple interpretations, but they failed
to present affirmative evidence that no remedial action was necessary because
minority -owned small businesses enjoy non-discriminatory access to and partici-
pation in federally assisted highway contracts. Thus, they failed to meet their ulti-
mate burden to prove that the DBE program is unconstitutional on this ground."22
When the statistical information is sufficient to support the inference of discrimi-
nation, the plaintiff must prove that the statistics are flawed.23 A plaintiff cannot
rest upon general criticisms of studies or other related evidence; it must meet its
burden that the government's proof is inadequate to meet strict scrutiny, render-
ing the legislation or government program illega1.24
14. United States v Carolene Products Co., 304 U.S. 144 (1938).
15. Heller v. Doe, 509 U.S. 312, 320 (1993).
16. The standard applicable to status based on sexual orientation of gender identity has not yet been clarified by the courts.
17. Aiken v. City of Memphis, 37 F.3d 1155, 1162 (61h Cir. 1994).
18. Scott, 199 F.3d at 219; Adarand Constructors, Inc. v. Slater, 228 F.3d 1147, 1166 (10" Cir. 2000), cert. granted, 532 U.S.
941, then dismissed as improvidently granted, 534 U.S. 103 (2001) ("Adarand Vll").
19. Engineering Contractors Association of South Florida, Inc. v. Metropolitan Dade County, 122 F.3d 895, 916 (111h Cir.
1997) ("Engineering Contractors 11").
20. Concrete Works of Colorado, Inc. v. City and County of Denver, 321 F.3d 950, 989 (loth Cir. 2003), cert. denied, 540 U.S.
1027 (2003) ("Concrete Works IV").
21. H.B. Rowe Co., Inc. v. Tippett, 615 F.3d 233, 241-242 (4th Cir. 2010); Midwest Fence Corp. v. U.S. Department of Transpor-
tation, 84 F. Supp. 3d 705 (N.D. III. 2015), affirmed, 840 F.3d 932 (7th Cir. 2016) ("Midwest Fence II").
22. Sherbrooke Turf, Inc. v. Minnesota Department of Transportation, 345 F.3d. 964, 970 (8th Cir. 2003), cert. denied, 541 U.S.
1041 (2004).
23. Coral Construction Co., 941 F. 2d at 921; Engineering Contractors II, 122 F.3d at 916.
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City of Fort Worth Disparity Study 2020
To meet strict scrutiny, studies have been conducted to gather the statistical and
anecdotal evidence necessary to support the use of race- and gender -conscious
measures to combat discrimination. These are commonly referred to as "disparity
studies" because they analyze any disparities between the opportunities and
experiences of minority- and women -owned firms and their actual utilization com-
pared to White male -owned businesses. Quality studies also examine the ele-
ments of the agency's program to determine whether it is sufficiently narrowly
tailored. The following is a detailed discussion of the legal parameters and the
requirements for conducting studies to support defensible programs.
B. Elements of Strict Scrutiny
In its decision in City of Richmond v. J.A. Croson Co., the United States Supreme
Court established the constitutional contours of permissible race -based public
contracting programs. Reversing long established Equal Protection jurisprudence,
the Court, for the first time, extended the highest level of judicial examination
from measures designed to limit the rights and opportunities of minorities to legis-
lation that inures to the benefit of these victims of historic discrimination. Strict
scrutiny requires that a government entity prove both its "compelling governmen-
tal interest" in remediating identified discrimination based upon "strong evidence"
and that the measures adopted to remedy that discrimination are "narrowly tai-
lored" to that evidence. However benign the government's motive, race is always
so suspect a classification that its use must pass the highest constitutional test of
"strict scrutiny".
The Court struck down the City of Richmond's Minority Business Enterprise Plan
("Plan") because it failed to satisfy the strict scrutiny analysis applied to "race -
based" government programs. The City's "set -aside" Plan required prime contrac-
tors awarded City construction contracts to subcontract at least 30 percent of the
project to Minority -Owned Business Enterprises ("MBEs"). A business located any-
where in the nation was eligible to participate so long as it was at least 51 percent
owned and controlled by minority citizens or lawfully -admitted permanent resi-
dents.
The Plan was adopted following a public hearing during which no direct evidence
was presented that the City had discriminated on the basis of race in contracts or
that its prime contractors had discriminated against minority subcontractors. The
only evidence before the City Council was: (a) Richmond's population was 50 per-
cent Black, yet less than one percent of its prime construction contracts had been
awarded to minority businesses; (b) local contractors' associations were virtually
24. Adarand VII, 228 F.3d at 1166; Engineering Contractors ll, 122 F.3d at 916; Concrete Works of Colorado, Inc. v. City and
County of Denver, 36 F.3d 1513, 1522-1523 (10th Cir. 1994) ("Concrete Works II"); Webster v. Fulton County, Georgia, 51
F.Supp.2d 1354, 1364 (N.D. Ga. 1999), affd per curiam, 218 F. 3d 1267 (11th Cir. 2000); see also, Wygant v. Jackson
Board of Education, 476 U.S. 267, 277-278 (1986).
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City of Fort Worth Disoarity Study 2020
all White; (c) the City Attorney's opinion that the Plan was constitutional; and (d)
generalized statements describing widespread racial discrimination in the local,
Virginia, and national construction industries.
In affirming the court of appeals' determination that the Plan was unconstitu-
tional, Justice Sandra Day O'Connor's plurality opinion rejected the extreme posi-
tions that local governments either have carte blanche to enact race -based
legislation or must prove their own active participation in discrimination:
[A] state or local subdivision... has the authority to eradicate the effects
of private discrimination within its own legislative jurisdiction....
[Richmond] can use its spending powers to remedy private
discrimination, if it identifies that discrimination with the particularity
required by the Fourteenth Amendment...[1]f the City could show that
it had essentially become a "passive participant" in a system of racial
exclusion ...[it] could take affirmative steps to dismantle such a
system."25
Strict scrutiny of race -based remedies is required to determine whether racial clas-
sifications are in fact motivated by notions of racial inferiority or blatant racial pol-
itics. This highest level of judicial review "smokes out" illegitimate uses of race by
ensuring that the legislative body is pursuing an important enough goal to warrant
use of a highly suspect tool.26 It also ensures that the means chosen "fit" this com-
pelling goal so closely that there is little or no likelihood that the motive for the
classification was illegitimate racial prejudice or stereotype. The Court made clear
that strict scrutiny is designed to expose racial stigma; racial classifications are said
to create racial hostility if they are based on notions of racial inferiority.
Richmond's evidence was found to be lacking in every respect. The City could not
rely upon the disparity between its utilization of MBE prime contractors and Rich-
mond's minority population because not all minority persons would be qualified to
perform construction projects; general population representation is irrelevant. No
data were presented about the availability of MBEs in either the relevant market
area or their utilization as subcontractors on City projects.
According to Justice O'Connor, the extremely low MBE membership in local con-
tractors' associations could be explained by "societal" discrimination or perhaps
Blacks' lack of interest in participating as business owners in the construction
industry. To be relevant, the City would have to demonstrate statistical disparities
between eligible MBEs and actual membership in trade or professional groups.
Further, Richmond presented no evidence concerning enforcement of its own
25. 488 U.S. at 491-92.
26. See also Grutter v. Bollinger, 539 U.S. 306, 327 (2003) ("Not every decision influenced by race is equally objectionable,
and strict scrutiny is designed to provide a framework for carefully examining the importance and the sincerity of the
reasons advanced by the governmental decisionmaker for the use of race in that particular context.").
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City of Fort Worth Disparity Study 2020
anti -discrimination ordinance. Finally, the City could not rely upon Congress'
determination that there has been nationwide discrimination in the construction
industry. Congress recognized that the scope of the problem varies from market to
market, and, in any event, it was exercising its powers under Section Five of the
Fourteenth Amendment. Local governments are further constrained by the
Amendment's Equal Protection Clause.
In the case at hand, the City has not ascertained how many minority
enterprises are present in the local construction market nor the level of
their participation in City construction projects. The City points to no
evidence that qualified minority contractors have been passed over for
City contracts or subcontracts, either as a group or in any individual
case. Under such circumstances, it is simply impossible to say that the
City has demonstrated "a strong basis in evidence for its conclusion
that remedial action was necessary."27
This analysis was applied only to Blacks. The Court emphasized that there was
"absolutely no evidence" of discrimination against other minorities. "The random
inclusion of racial groups that, as a practical matter, may have never suffered from
discrimination in the construction industry in Richmond, suggests that perhaps the
City's purpose was not in fact to remedy past discrimination." 28
Having found that Richmond had not presented evidence in support of its compel-
ling interest in remediating discrimination —the first prong of strict scrutiny —the
Court made two observations about the narrowness of the remedy —the second
prong of strict scrutiny. First, Richmond had not considered race -neutral means to
increase MBE participation. Second, the 30 percent quota had no basis in evi-
dence, and was applied regardless of whether the individual MBE had suffered dis-
crimination.29 The Court noted that the City "does not even know how many MBEs
in the relevant market are qualified to undertake prime or subcontracting work in
public construction projects." 30
Apparently recognizing that her opinion might be misconstrued to eliminate all
race -conscious contracting efforts, Justice O'Connor closed with these admoni-
tions:
Nothing we say today precludes a state or local entity from taking
action to rectify the effects of identified discrimination within its
jurisdiction. If the City of Richmond had evidence before it that non -
minority contractors were systematically excluding minority businesses
27. Croson. 488 U.S. at 510.
28. Id.
29. See Grutter, 529 U.S. at 336-337 (quotas are not permitted; race must be used in a flexible, non -mechanical way).
30. Croson, 488 U.S. at 502.
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from subcontracting opportunities, it could take action to end the
discriminatory exclusion. Where there is a significant statistical
disparity between the number of qualified minority contractors willing
and able to perform a particular service and the number of such
contractors actually engaged by the locality or the locality's prime
contractors, an inference of discriminatory exclusion could arise. Under
such circumstances, the City could act to dismantle the closed business
system by taking appropriate measures against those who discriminate
based on race or other illegitimate criteria. In the extreme case, some
form of narrowly tailored racial preference might be necessary to break
down patterns of deliberate exclusion... Moreover, evidence of a
pattern of individual discriminatory acts can, if supported by
appropriate statistical proof, lend support to a local government's
determination that broader remedial relief is justified.31
While much has been written about Croson, it is worth stressing what evidence
was and was not before the Court. First, Richmond presented no evidence regard-
ing the availability of MBEs to perform as prime contractors or subcontractors and
no evidence of the utilization of minority -owned subcontractors on City con-
tracts.32 Nor did Richmond attempt to link the remedy it imposed to any evidence
specific to the program; it used the general population of the City rather than any
measure of business availability.
Some commentators have taken this dearth of any particularized proof and
argued that only the most particularized proof can suffice in all cases. They leap
from the Court's rejection of Richmond's reliance on only the percentage of Blacks
in the City's population to a requirement that only firms that bid or have the
"capacity" or "willingness" to bid on a particular contract at a particular time can
be considered in determining whether discrimination against Black businesses
infects the local economy.33
This argument has been rejected explicitly by some courts. In denying the plain-
tiff's summaryjudgment motion to enjoin the City of New York's M/WBE construc-
tion ordinance, the court stated:
[I]t is important to remember what the Croson plurality opinion did and
did not decide. The Richmond program, which the Croson Court struck
down, was insufficient because it was based on a comparison of the
minority population in its entirety in Richmond, Virginia (50%) with the
number of contracts awarded to minority businesses (.67%). There
were no statistics presented regarding the number of minority -owned
31. Id. at 509 (citations omitted).
32. Id. at 502.
33. See, for example, Northern Contracting III, 473 F.3d at 723.
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contractors in the Richmond area, Croson, 488 U.S. at 499, and the
Supreme Court was concerned with the gross generality of the
statistics used in justifying the Richmond program. There is no
indication that the statistical analysis performed by [the consultant] in
the present case, which does contain statistics regarding minority
contractors in New York City, is not sufficient as a matter of law under
Croson.34
Further, Richmond made no attempt to narrowly tailor a goal for the procurement
at issue that reflected the reality of the project. Arbitrary quotas, and the unyield-
ing application of those quotas, did not support the stated objective of ensuring
equal access to City contracting opportunities. The Croson Court said nothing
about the constitutionality of flexible goals based upon the availability of MBEs to
perform the scopes of the contract in the government's local market area. In con-
trast, the USDOT DBE program avoids these pitfalls. 49 C.F.R. Part 26 "provides for
a flexible system of contracting goals that contrasts sharply with the rigid quotas
invalidated in Croson."
While strict scrutiny is designed to require clear articulation of the evidentiary
basis for race -based decision -making and careful adoption of remedies to address
discrimination, it is not, as Justice O'Connor stressed, an impossible test that no
proof can meet. Strict scrutiny need not be "fatal in fact".
C. Establishing a "Strong Basis in Evidence" for the City
of Fort Worth's Minority- and Women -Owned
Business Enterprise Program
The case law on the DBE program should guide the City's program for locally
funded contracts. Whether the program is called an M/WBE program or a DBE
program or any other moniker, the strict scrutiny test applies. As discussed, 49
C.F.R. Part 26 has been upheld by every court, and local programs for Minority -
and Women -Owned Business Enterprises ("M/WBEs") will be judged against this
legal framework.35 We note that programs for veterans, persons with disabilities,
preferences based on geographic location or truly race- and gender -neutral small
business efforts are not subject to strict scrutiny and no evidence comparable to
that in a disparity study is needed to enact such initiatives.
34. North Shore Concrete and Associates, Inc. v. City of New fork, 1998 U.S. Dist. Lexis 6785, *28-29 (E.D. N.Y. 1998); see also
Harrison & Burrowes Bridge Constructors, Inc. v. Cuomo, 981 F.2d 50, 61-62 (2nd Cir. 1992) ("Croson made only broad
pronouncements concerning the findings necessary to support a state's affirmative action plan"); cf. Concrete Works II,
36 F.3d at 1528 (City may rely on "data reflecting the number of MBEs and WBEs in the marketplace to defeat the chal-
lenger's summary judgment motion").
35. Midwest Fence II, 840 F.3d. at 953.
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It is well established that disparities between an agency's utilization of M/WBEs
and their availability in the relevant marketplace provide a sufficient basis for the
consideration of race- or gender -conscious remedies. Proof of the disparate
impacts of economic factors on M/WBEs and the disparate treatment of such
firms by actors critical to their success will meet strict scrutiny. Discrimination
must be shown using statistics and economic models to examine the effects of sys-
tems or markets on different groups, as well as by evidence of personal experi-
ences with discriminatory conduct, policies or systems.36 Specific evidence of
discrimination or its absence may be direct or circumstantial and should include
economic factors and opportunities in the private sector affecting the success of
M/WBEs.37
Croson's admonition that "mere societal" discrimination is not enough to meet
strict scrutiny is met where the government presents evidence of discrimination in
the industry targeted by the program. "If such evidence is presented, it is immate-
rial for constitutional purposes whether the industry discrimination springs from
widespread discriminatory attitudes shared by society or is the product of policies,
practices, and attitudes unique to the industry... The genesis of the identified dis-
crimination is irrelevant." There is no requirement to "show the existence of spe-
cific discriminatory policies and that those policies were more than a reflection of
societal discrimination."38
The City of Fort Worth need not prove that it is itself guilty of discrimination to
meet its burden. In upholding Denver's M/WBE construction program, the court
stated that Denver can show its compelling interest by "evidence of private dis-
crimination in the local construction industry coupled with evidence that it has
become a passive participant in that discrimination... [by] linking its spending prac-
tices to the private discrimination."39 Denver further linked its award of public dol-
lars to discriminatory conduct through the testimony of M/WBEs that identified
general contractors who used them on City projects with M/WBE goals but
refused to use them on private projects without goals.
The following are the evidentiary elements courts have looked to in examining the
basis for and determining the constitutional validity of race- and gender -conscious
local programs and the steps in performing a disparity study necessary to meet
those elements.
36. Adarand VII, 228 F.3d at 1166 ("statistical and anecdotal evidence are appropriate")
37. Id.
38. Concrete Works IV, 321 F.3d at 976.
39. Id. at 977.
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1. Define the City of Fort Worth's Market Areas
The first step is to determine the market area in which the City operates. Cro-
son states that a state or local government may only remedy discrimination
within its own contracting market area. The City of Richmond was specifically
faulted for including minority contractors from across the country in its pro-
gram, based on national data considered by Congress.40 The City must there-
fore empirically establish the geographic and product dimensions of its
contracting and procurement market area to ensure that the program meets
strict scrutiny. This is a fact driven inquiry; it may or may not be the case that
the market area is the government's jurisdictional boundaries.41
A commonly accepted definition of geographic market area for disparity stud-
ies is the locations that account for at least 75 percent of the agency's contract
and subcontract dollar payments.42 Likewise, the accepted approach is to ana-
lyze those detailed industries that make up at least 75 percent of the prime
contract and associated subcontract payments for the study period.43 This
produces the utilization results within the geographic market area.
2. Examine Disparities between the City of Fort Worth's Utilization
of M/WBEs and M/WBE Availability
Next, the study must estimate the availability of minorities and women to par-
ticipate in the City's contracts as prime contractors and associated subcontrac-
tors compared to the City's utilization of such firms. The primary inquiry is
whether there are statistically significant disparities between the availability of
M/WBEs and their utilization.
Where there is a significant statistical disparity between the
number of qualified minority contractors willing and able to
perform a particular service and the number of such
contractors actually engaged by the locality or the locality's
prime contractors, an inference of discriminatory exclusion
could arise... In the extreme case, some form of narrowly
tailored racial preference might be necessary to break down
patterns of deliberate exclusion.44
40. Croson, 488 U.S. at 508.
41. Concrete Works 11, 36 F.3d at 1520 (to confine data to strict geographic boundaries would ignore "economic reality").
42. National Academies of Sciences, Engineering, and Medicine 2010, Guidelines for Conducting a Disparity and Availability
Studyfor the Federal DBE Program. Washington, DC: The National Academies Press. https://doi.org/10.17226/14346.
("National Disparity Study Guidelines")
43. Id. at pp. 50-51.
44. Croson, 488 U.S. at 509; see Webster, 51 F.Supp.2d at 1363, 1375.
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This is known as the "disparity ratio" or "disparity index". A disparity ratio mea-
sures the participation of a group in the government's contracting opportuni-
ties by dividing that group's utilization by the availability of that group and
multiplying that result by 100. Courts have looked to disparity indices in deter-
mining whether strict scrutiny is satisfied.45 An index less than 100 percent
indicates that a given group is being utilized less than would be expected
based on its availability, and courts have adopted the Equal Employment
Opportunity Commission's "80 percent" rule that a ratio less than 80 percent
presents a prima facie case of discrimination.46 Where possible, statistical
techniques are applied to examine whether any disparities are significant. In
addition to creating the disparity ratio, correct measures of availability are nec-
essary to determine whether discriminatory barriers depress the formation of
firms by minorities and women, and the success of such firms in doing business
in both the private and public sectors, known as an "economy -wide" analy-
sis.47
To determine disparity ratios once utilization has been established, the next
step is to calculate the availability of minority- and women -owned firms in the
government's market area. Based on the product and geographic utilization
data, the study should calculate weighted M/WBE availability estimates of
ready, willing and able firms in the City's market. This is generally the "Custom
Census" methodology recommended in the National Study Guidelines and
repeatedly approved by the courts. This methodology includes both certified
firms and non -certified firms owned by minorities or women.48
The Custom Census involves the following steps: 1. Develop directories of M/
WBEs. 2. Define a subset of business data to establish the availability of all
firms. 3. Merge the directory with the contract data file created during the uti-
lization analysis. 4. Assign race, gender and 6-digit North American Industry
Classification System codes. This analysis results in an overall availability esti-
mate of the number of ready, willing and able M/WBEs that is a narrowly tai-
lored, dollar -weighted average of all the underlying industry availability
numbers, with larger weights applied to industries with relatively more spend-
45. Scott, 199 F.3d at 218; see also Concrete Works II, 36 F.3d at 1526-1527; O'Donnell Construction Co., Inc, v. State of
Columbia, 963 F.2d 420, 426 (D.C. Cir. 1992); Cone Corporation v. Hillsborough County, 908 F.2d 908, 916 (11th Cir.
1990), cert. denied, 498 U.S. 983 (1990).
46. 29 C.F.R. § 1607.4(D) ("A selection rate for any race, sex, or ethnic group which is less than four -fifths (4/5) (or eighty
percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies
as evidence of adverse impact, while a greater than four -fifths rate will generally not be regarded by Federal enforce-
ment agencies as evidence of adverse impact."); see, Engineering Contractors II, 122 F3d at 914.
47. Northern Contracting, Inc. v. Illinois Department of Transportation, 2005 U.S. Dist. LEXIS 19868, at *70 (Sept. 8, 2005)
("Northern Contracting II") (IDOT's custom census approach was supportable because "discrimination in the credit and
bonding markets may artificially reduce the number of M/WBEs").
48. See "National Disparity Study Guidelines," Chapter III, pp. 33-34.
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City of Fort Worth Disparity Study 2020
ing and lower weights applied to industries with relatively less spending. The
availability figures should also be sub -divided by race, ethnicity, and gender.
This approach has several benefits. As held by the federal court of appeals in
finding the Illinois Department of Transportation's program to be constitu-
tional, the "remedial nature of [DBE programs] militates in favor of a method
of D/M/W/SBE availability calculation that casts a broader net" than merely
using bidders lists or other agency or government directories. A broad meth-
odology is also recommended by the USDOT for the federal DBE program,
which has been upheld by every court.49
Other methodologies relying only on vendor or bidder lists may overstate or
understate availability as a proportion of City's actual markets because they
reflect only the results of the agency's own activities, not an accurate portrayal
of marketplace behavior. Other methods of whittling down availability by using
assumptions based on surveys with limited response rates or guesses about
firms' capacities easily lead to findings that women and minority businesses no
longer face discrimination or are unavailable, even when the firm is actually
working on agency contracts.
Many plaintiffs have argued that studies must somehow control for "capacity"
of M/WBEs to perform specific agency contracts. The definition of "capacity"
has varied based upon the plaintiff's particular point of view, but it has gener-
ally meant firm age, firm size (full time employees), firm revenues, bonding
limits and prior experience on agency projects (no argument has been made
outside of the construction industry).
This test has been rejected by the courts when directly addressed by the plain-
tiff and the agency. As recognized by the courts and the National Model Dis-
parity Study Guidelines, these capacity factors are not race- and gender -
neutral variables. Discriminatory barriers depress the formation of firms by
minorities and women, and the success of such firms in doing business in both
the private and public sectors. In a perfectly discriminatory system, M/WBEs
would have no "capacity" because they would have been prevented from
developing any "capacity". That certainly would not mean that there was no
discrimination or that the government must sit by helplessly and continue to
award tax dollars within the "market failure" of discrimination and without rec-
ognition of systematic, institutional race- and gender -based barriers. It is these
types of "capacity" variables where barriers to full and fair opportunities to
compete will be manifested. Capacity limitations on availability would import
the current effects of past discrimination into the model, because if M/WBEs
are newer or smaller because of discrimination, then controlling for those vari-
49. See "Tips for Goal Setting in the Disadvantaged Business Enterprise (DBE) Program", https://www.transportation.gov/
sites/dot.gov/files/docs/Tips_for_Goa I-Setting_in_D BE_Progra m_20141106. pdf.
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abler will mask the phenomenon of discrimination that is being studied. In
short, identifiable indicators of capacity are themselves impacted and reflect
discrimination. The courts have agreed. Based on expert testimony, judges
understand that factors such as size and experience reflect outcomes influ-
enced by race and gender: "M/WBE construction firms are generally smaller
and less experienced because of discrimination."50
To rebut this framework, a plaintiff must proffer its own study showing that
the disparities disappear when whatever variables it believes are important
are held constant and that controlling for firm specialization explained the dis-
parities.S1 Additionally, Croson does not "require disparity studies that mea-
sure whether construction firms are able to perform a particular contract."52
There are also practical reasons not to attempt to circumscribe availability
through "capacity" limitations. First, there is no agreement on what variables
are relevant or how those variables are to be measured for the purpose of
examining whether race and gender barriers impede the success of minority
and women entrepreneurs. For example, a newly formed firm might be the
result of a merger of much older entities or have been formed by highly expe-
rienced owners; it is unclear how such variations would shed light on the issues
in a disparity study. Second, since the amount of necessary capacity will vary
from contract to contract, there is no way to establish universal standards that
would satisfy the capacity limitation. Third, firms' capacities are highly elastic.
Businesses can add staff, rent equipment, hire subcontractors or take other
steps to be able to perform a particular scope on a particular contract. What-
ever a firm's capacity might have been at the time of the study, it may well
have changed by the time the agency seeks to issue a specific future solicita-
tion. Fourth, there are no reliable data sources for the type of information usu-
ally posited as important by those who seek to reduce availability estimates
using capacity factors. While a researcher might have information about firms
that are certified as M/WBEs or that are prequalified by an agency (which usu-
ally applies only to construction firms), there is no database for that informa-
tion for non -certified firms, especially white male -owned firms that usually
function as subcontractors. Any adjustment to the numerator (M/WBEs) must
also be made to the denominator (all firms), as a researcher cannot assume
that all white male -owned firms have adequate capacity but that M/WBEs do
not.
50. Concrete Works IV, 321 F.3d at 983 (emphasis in the original).
51. Conjecture and unsupported criticism of the government are not enough. The plaintiff must rebut the government's evi-
dence and introduce "credible, particularized evidence" of its own. See Midwest Fence II, 840 F.3d 942 (7th Cir. 2016)
(upholding the Illinois Tollway's program for state -funded contracts modeled after Part 26 and based on CHA's expert
testimony).
52. Croson, 488 U.S. at 508 (emphasis in the original).
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City of Fort Worth Disparity Study 2020
Capacity variables should be examined at the economy -wide level of business
formation and earnings, discussed in Chapter V, not at the first stage of the
analysis, to reduce the downward bias that discrimination imposes on M/
WBEs' availability and the upward bias enjoyed by non-M/WBEs. These factors
should also be explored during anecdotal data collection, discussed in Chapter
VI. They are also relevant to contract goal setting, where the agency must use
its judgment about whether to adjust the initial goal that results from the
study data based on current market conditions and current firm availability,
discussed in Chapter VII.
The City of Fort Worth need not prove that the statistical inferences of discrim-
ination are "correct." In upholding Denver's M/WBE Program, the Tenth Circuit
noted that strong evidence supporting Denver's determination that remedial
action was necessary need not have been based upon "irrefutable or defini-
tive" proof of discrimination. Statistical evidence creating inferences of dis-
criminatory motivations was sufficient and therefore evidence of market area
discrimination was properly used to meet strict scrutiny. To rebut this type of
evidence, the plaintiff must prove by a preponderance of the evidence that
such proof does not support those inferences.53
Nor must the City demonstrate that the "ordinances will change discriminatory
practices and policies" in the local market area; such a test would be "illogical"
because firms could defeat the remedial efforts simply by refusing to cease
discriminating.54
Next, Fort Worth need not prove that private firms directly engaged in any dis-
crimination in which the government passively participates do so intentionally,
with the purpose of disadvantaging minorities and women.
Denver's only burden was to introduce evidence which raised
the inference of discriminatory exclusion in the local
construction industry and link its spending to that
discrimination.... Denver was under no burden to identify any
specific practice or policy that resulted in discrimination.
Neither was Denver required to demonstrate that the purpose
of any such practice or policy was to disadvantage women or
minorities. To impose such a burden on a municipality would be
tantamount to requiring proof of discrimination and would
eviscerate any reliance the municipality could place on
statistical studies and anecdotal evidence.55
53. Concrete Works IV, 321 F. 3d at 971.
54. Id. at 973 (emphasis in the original).
55. Id. at 971.
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Similarly, statistical evidence by its nature cannot identify the individuals
responsible for the discrimination; there is no need to do so to meet strict
scrutiny, as opposed to an individual or class action lawsuit.56
3. Analyze Economy -Wide Evidence of Race- and Gender -Based
Disparities
The courts have repeatedly held that analysis of disparities in the rates at
which M/WBEs in the government's markets form businesses compared to
similar non-M/WBEs, their earnings from such businesses, and their access to
capital markets are highly relevant to the determination of whether the mar-
ket functions properly for all firms regardless of the race or gender of their
ownership. These analyses contributed to the successful defense of Chicago's
construction program. As similarly explained by the Tenth Circuit, this type of
evidence
demonstrates the existence of two kinds of discriminatory
barriers to minority subcontracting enterprises, both of which
show a strong link between racial disparities in the federal
government's disbursements of public funds for construction
contracts and the channeling of those funds due to private
discrimination. The first discriminatory barriers are to the
formation of qualified minority subcontracting enterprises due
to private discrimination, precluding from the outset
competition for public construction contracts by minority
enterprises. The second discriminatory barriers are to fair
competition between minority and non -minority
subcontracting enterprises, again due to private discrimination,
precluding existing minority firms from effectively competing
for public construction contracts. The government also
presents further evidence in the form of local disparity studies
of minority subcontracting and studies of local subcontracting
markets after the removal of affirmative action programs.... The
government's evidence is particularly striking in the area of the
race -based denial of access to capital, without which the
formation of minority subcontracting enterprises is stymied.57
Business discrimination studies and lending formation studies are relevant and
probative because they show a strong link between the disbursement of public
funds and the channeling of those funds due to private discrimination. "Evi-
56. Id. at 973.
57. Adorond VII, 228 F.3d 1147, 1168-69 (101h Cir. 2000), cert. granted, 532 U.S. 941, then dismissed os improvidently
granted, 534 U.S. 103 (2001).
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dence that private discrimination results in barriers to business formation is
relevant because it demonstrates that M/WBEs are precluded at the outset
from competing for public construction contracts. Evidence of barriers to fair
competition is also relevant because it again demonstrates that existing M/
WBEs are precluded from competing for public contracts."58 Despite the con-
tentions of plaintiffs that possibly dozens of factors might influence the ability
of any individual to succeed in business, the courts have rejected such impossi-
ble tests and held that business formation studies are not flawed because they
cannot control for subjective descriptions such as "quality of education," "cul-
ture" and "religion."
For example, in unanimously upholding the DBE Program for federal -aid trans-
portation contracts, the courts agree that disparities between the earnings of
minority -owned firms and similarly situated non -minority -owned firms and the
disparities in commercial loan denial rates between Black business owners
compared to similarly situated non -minority business owners are strong evi-
dence of the continuing effects of discrimination.59 The Eighth Circuit Court of
Appeals took a "hard look" at the evidence Congress considered, and con-
cluded that the legislature had
spent decades compiling evidence of race discrimination in
government highway contracting, of barriers to the formation
of minority -owned construction businesses, and of barriers to
entry. In rebuttal, [the plaintiffs] presented evidence that the
data were susceptible to multiple interpretations, but they
failed to present affirmative evidence that no remedial action
was necessary because minority -owned small businesses enjoy
non-discriminatory access to and participation in highway
contracts. Thus, they failed to meet their ultimate burden to
prove that the DBE program is unconstitutional on this
ground.6o
4. Evaluate Anecdotal Evidence of Race- and Gender -Based Barriers
A study should further explore anecdotal evidence of experiences with dis-
crimination in contracting opportunities because it is relevant to the question
of whether observed statistical disparities are due to discrimination and not to
58. Id.
59. Id.; Western States, 407 F.3d at 993; Northern Contracting, Inc. v. Illinois Department of Transportation, 2004 U.S. Dist.
LEXIS 3226 at *64 (N.D. III., Mar. 3, 2004) ("Northern Contracting 1").
60. Sherbrooke, 345 F.3d. at 970; see, also, Adarand VII, 228 F.3d at 1175 (Plaintiff has not met its burden "of introducing
credible, particularized evidence to rebut the government's initial showing of the existence of a compelling interest in
remedying the nationwide effects of past and present discrimination in the federal construction procurement subcon-
tracting market.").
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some other non-discriminatory cause or causes. As observed by the Supreme
Court, anecdotal evidence can be persuasive because it "brought the cold [sta-
tistics] convincingly to life."61 Testimony about discrimination practiced by
prime contractors, bonding companies, suppliers, and lenders has been found
relevant regarding barriers both to minority firms' business formation and to
their success on governmental projects.62 While anecdotal evidence is insuffi-
cient standing alone, "[p]ersonal accounts of actual discrimination or the
effects of discriminatory practices may, however, vividly complement empiri-
cal evidence. Moreover, anecdotal evidence of a [government's] institutional
practices that exacerbate discriminatory market conditions are [sic] often par-
ticularly probative."63 "[W]e do not set out a categorical rule that every case
must rise or fall entirely on the sufficiency of the numbers. To the contrary,
anecdotal evidence might make the pivotal difference in some cases; indeed,
in an exceptional case, we do not rule out the possibility that evidence not
reinforced by statistical evidence, as such, will be enough.',64
There is no requirement that anecdotal testimony be "verified" or corrobo-
rated, as befits the role of evidence in legislative decision -making as opposed
to judicial proceedings. "Plaintiff offers no rationale as to why a fact finder
could not rely on the State's'unverified' anecdotal data. Indeed, a fact finder
could very well conclude that anecdotal evidence need not — indeed cannot —
be verified because it 'is nothing more than a witness' narrative of an incident
told from the witness' perspective and including the witness' perception."65
Likewise, the Tenth Circuit held that "Denver was not required to present cor-
roborating evidence and [plaintiff] was free to present its own witnesses to
either refute the incidents described by Denver's witnesses or to relate their
own perceptions on discrimination in the Denver construction industry."66
D. Narrowly Tailoring a Minority -Owned and Women -
Owned Business Enterprise Procurement Program
for the City of Fort Worth
Even if the City has a strong basis in evidence to believe that race -based measures
are needed to remedy identified discrimination, the program must still be nar-
rowly tailored to that evidence. As discussed above, programs that closely mirror
61. International Brotherhood of Teamsters v. United States, 431 U.S. 324, 399 (1977).
62. Adarand VII, 228 F.3d at 1168-1172.
63. Concrete Works 11, 36 F.3d at 1520,1530.
64. Engineering Contractors 11, 122 F.3d at 926.
65. Id. at 249.
66. Concrete Works IV, 321 F.3d at 989.
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City of Fort Worth Disparity Study 2020
those of the U.S. Department of Transportation's Disadvantaged Business Enter-
prise program67 have been upheld using that framework.68 The courts have
repeatedly examined the following factors in determining whether race -based
remedies are narrowly tailored to achieve their purpose:
• The efficacy of race -neutral remedies at overcoming identified
discrimination;
• The relationship of numerical benchmarks for government spending to the
availability of minority- and women -owned firms and to subcontracting goal
setting procedures;
• The flexibility of the program requirements, including the provision for good
faith efforts to meet goals and contract specific goal setting procedures;
• The congruence between the remedies adopted and the beneficiaries of
those remedies;
• Any adverse impact of the relief on third parties; and
• The duration of the program.69
1. Consider Race- and Gender -Neutral Remedies
Race- and gender -neutral approaches are necessary components of a defensi-
ble and effective M/WBE program70 and the failure to seriously consider such
remedies has been fatal to several programs.71 Difficulty in accessing procure-
ment opportunities, restrictive bid specifications, excessive experience
requirements, and overly burdensome insurance and/or bonding require-
ments, for example, might be addressed by the City without resorting to the
use of race or gender in its decision -making. Effective remedies include unbun-
dling of contracts into smaller units, providing technical support, and develop-
ing programs to address issues of financing, bonding, and insurance important
to all small and emerging businesses.72 Further, governments have a duty to
67. 49 C.F.R. Part 26.
68. See, e.g., Midwest Fence 11, 840 F.3d at 953 (upholding the Illinois Tollway's program for state -funded contracts mod-
elled after Part 26 and based on CHA's expert testimony).
69. United States v. Paradise, 480 U.S. 149, 171 (1987); see, also, Sherbrooke, 345 F.3d at 971-972.
70. Croson, 488 U.S. at 507 (Richmond considered no alternatives to race -based quota); Associated General Contractors if
Ohio v. Drabik, 214 F.3d at 738 (6th Cir. 2000) ("Drabik H"); Contractors Association of Eastern Pennsylvania v. City of Phil-
adelphia, 91 F.3d 586, 609 (3rd Cir. 1996) ("Philadelphia III") (City's failure to consider race -neutral alternatives was par-
ticularly telling); Webster, 51 F.Supp.2d at 1380 (for over 20 years County never seriously considered race -neutral
remedies); cf. Aiken, 37 F.3d at 1164 (failure to consider race -neutral method of promotions suggested a political rather
than a remedial purpose).
71. See, e.g., Florida A.G.C. Council, Inc. v. State of Florida, Case No.: 4:03-CV-59-SPM at 10 (N. Dist. Fla. 2004) ("There is
absolutely no evidence in the record to suggest that the Defendants contemplated race -neutral means to accomplish
the objectives" of the statute.); Engineering Contractors 11, 122 F.3d at 928.
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City of Fort Worth Disoarity Study 2020
ferret out and punish discrimination against minorities and women by their
contractors, staff, lenders, bonding companies or others.73
The requirement that the agency must meet the maximum feasible portion of
the goal through race -neutral measures, as well as estimate that portion of the
goal that it predicts will be met through such measures, has been central to
the holdings that the DBE program regulations meet narrow tailoring.74
However, strict scrutiny does not require that every race -neutral approach
must be implemented and then proven ineffective before race -conscious rem-
edies may be utilized.75 While an entity must give good faith consideration to
race -neutral alternatives, "strict scrutiny does not require exhaustion of every
possible such alternative... however irrational, costly, unreasonable, and
unlikely to succeed such alternative might be... [S]ome degree of practicality is
subsumed in the exhaustion requirement."76
2. Set Targeted M/WBE Goals
Numerical goals or benchmarks for M/WBE participation must be substantially
related to their availability in the relevant market.77 For example, the DBE pro-
gram regulations require that the overall goal must be based upon demonstra-
ble evidence of the number of DBEs ready, willing, and able to participate on
the recipient's federally assisted contracts.78 "Though the underlying esti-
mates may be inexact, the exercise requires the States to focus on establishing
realistic goals for DBE participation in the relevant contracting markets. This
stands in stark contrast to the program struck down in Croson."79
Goals can be set at various levels of particularity and participation. The City
may set an overall, aspirational goal for its annual, aggregate spending. Annual
goals can be further disaggregated by race and gender. Approaches range
from a single M/WBE or DBE goal that includes all racial and ethnic minorities
and non-minority80 women, to separate goals for each minority group and
women.81
72. See 49 CFR § 26.51.0.
73. Croson, 488 U.S. at 503 n.3; Webster, 51 F.Supp.2d at 1380.
74. See, e.g., Sherbrooke, 345 F.3d. at 973
75. Grutter, 529 U.S. at 339.
76. Coral Construction, 941 F.2d at 923.
77. Webster, 51 F.Supp.2d at 1379, 1381 (statistically insignificant disparities are insufficient to support an unexplained goal
of 35 percent M/WBE participation in County contracts); see also Associated Utility Contractors of Maryland, Inc. v.
Mayor and City Council of Baltimore, et al., 83 F.Supp.2d 613, 621 (D. Md. 2000) ('Baltimore I").
78. 49 C.F.R. § 26.45 (b)
79. Id.
80. See, 49 C.F.R. §26.45(h) (overall goal must not be subdivided into group -specific goals).
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City of Fort Worth Disparity Study 2020
The Eighth Circuit has recognized that goal setting is not an absolute science.
In holding the DBE regulations to be narrowly tailored, the court noted that
"[t]hough the underlying estimates may be inexact, the exercise requires the
States to focus on establishing realistic goals for DBE participation in the rele-
vant contracting markets."82 However, sheer speculation cannot form the
basis for an enforceable measure.83
It is settled case law that goals for a particular solicitation should reflect the
particulars of the contract, not reiterate annual aggregate targets; goals must
be contract specific. "Standard" goals are not defensible. Contract goals must
be based upon availability of M/WBEs to perform the anticipated scopes of the
contract, location, progress towards meeting annual goals, and other factors.
Not only is this legally mandated,84 but this approach also reduces the need to
conduct good faith efforts reviews, as well as the temptation to create "front"
companies and sham participation to meet unreasonable contract goals. While
this is more labor intensive than defaulting to the annual, overall goals, there is
no option to avoid meeting narrow tailoring because to do so would be more
burdensome.
3. Ensure Flexibility of Goals and Requirements
It is imperative that remedies not operate as fixed quotas.85 A M/WBE pro-
gram must provide for contract awards to firms who fail to meet the contract
goals but make good faith efforts to do so.86 In Croson, the Court refers
approvingly to the contract -by -contract waivers used in the USDOT's DBE pro-
gram.87 This feature has been central to the holding that the DBE program
meets the narrow tailoring requirement.88 Further, firms that meet the goals
cannot be favored over those who made good faith efforts and firms that
exceed the goals cannot be favored over those that did not exceed the goals.
81. See, Engineering Contractors 11, 122 F.3d at 900 (separate goals for Blacks, Hispanics and women).
82. Sherbrooke, 345 F.3d. at 972.
83. Builders Association of Greater Chicago v. City of Chicago, 298 F. Supp.2d 725, 740 (N.D. III. 2003) (City's MBE and WBE
goals were "formulistic" percentages not related to the availability of firms).
84. See, Sherbrooke, 345 F.3d at 972; Coral Construction, 941 F.2d at 924.
85. See, 49 C.F.R 26.43 (quotas are not permitted and setaside contracts may be used only in limited and extreme circum-
stances "when no other method could be reasonably expected to redress egregious instances of discrimination").
86. See, e.g., BAGC v. Chicago, 298 F. Supp.2d at 740 ("Waivers are rarely or never granted ... The City program is a rigid
numerical quota ... formulistic percentages cannot survive strict scrutiny.").
87. Croson, 488 U.S. at 508; see also Adarand VII, 228 F.3d at 1181.
88. See, e.g., Sherbrooke, 345 F.3d. at 972; Webster, 51 F. Supp. 2d at 1380.
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City of Fort Worth Disoarity Study 2020
4. Review Program Eligibility Over -Inclusiveness and Under -
Inclusiveness
The over- or under -inclusiveness of those persons to be included in the City's
program is an additional consideration and addresses whether the remedies
truly target the evil identified. The "fit" between the problem and the remedy
manifests in three ways: which groups to include, how to define those groups,
and which persons will be eligible to be included within those groups.
The groups to include must be based upon the evidence.89 The "random inclu-
sion" of ethnic or racial groups that may never have experienced discrimina-
tion in the entity's market area may indicate impermissible "racial politics".90
In striking down Cook County, Illinois' construction program, the Seventh Cir-
cuit remarked that a "state or local government that has discriminated just
against blacks may not by way of remedy discriminate in favor of blacks and
Asian -Americans and women."91 However, at least one court has held some
quantum of evidence of discrimination for each group is sufficient; Croson
does not require that each group included in the ordinance suffer equally from
discrimination.92 Therefore, remedies should be limited to those firms owned
by the relevant minority groups as established by the evidence that have suf-
fered actual harm in the market area.93
Next, the firm's owner(s) must be disadvantaged. The DBE Program's rebutta-
ble presumptions of social and economic disadvantage, including the require-
ment that the disadvantaged owner's personal net worth not exceed a certain
ceiling and that the firm must meet the Small Business Administration's size
definitions for its industry, have been central to the courts' holdings that it is
narrowly tailored.94 "[W]ealthy minority owners and wealthy minority -owned
firms are excluded, and certification is available to persons who are not pre-
sumptively [socially] disadvantaged but can demonstrate actual social and eco-
nomic disadvantage. Thus, race is made relevant in the program, but it is not a
89. Contractors Association of Eastern Pennsylvania v. City of Philadelphia, 6 F.3d 990, 1007-1008 (3rd Cir. 1993) ("Philadel-
phia 11") (strict scrutiny requires data for each minority group; data was insufficient to include Hispanics, Asians or Native
Americans).
90. Webster, 51 F.Supp.2d at 1380-1381.
91. Builders Association of Greater Chicago v. County of Cook, 256 F.3d 642, 646 (7th Cir. 2001) ("Cook
92. Concrete Works IV, 321 F.3d at 971 (Denver introduced evidence of bias against each group; that is sufficient).
93. Rowe , 615 F.3d at 254 ("[T]he statute contemplates participation goals only for those groups shown to have suffered
discrimination. As such, North Carolina's statute differs from measures that have failed narrow tailoring for overinclu-
siveness.").
94. Sherbrooke, 345 F.3d at 973; see also Grutter, 539 U.S. at 341; Adarand VII, 228 F.3d at 1183-1184 (personal net worth
limit is element of narrow tailoring); cf.. Associated General Contractors of Connecticut v. City of New Haven, 791 F.Supp.
941, 948 (D. Conn. 1992), vacated on other grounds, 41 F.3d 62 (2nd Cir. 1992) (definition of "disadvantage' was vague
and unrelated to goal).
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City of Fort Worth Disparity Study 2020
determinative factor."95 Further, anyone must be able to challenge the disad-
vantaged status of any firm.96
5. Evaluate the Burden on Third Parties
Failure to make "neutral" changes to contracting and procurement policies
and procedures that disadvantage M/WBEs and other small businesses may
result in a finding that the program unduly burdens non-M/WBEs.97 However,
"innocent" parties can be made to share some of the burden of the remedy for
eradicating racial discrimination.98 The burden of compliance need not be
placed only upon those firms directly responsible for the discrimination. The
proper focus is whether the burden on third parties is "too intrusive" or "unac-
ceptable".
Burdens must be proven and cannot constitute mere speculation by a plain-
tiff.99 "Implementation of the race -conscious contracting goals for which [the
federal authorizing legislation] provides will inevitably result in bids submitted
by non -DBE firms being rejected in favor of higher bids from DBEs. Although
the result places a very real burden on non -DBE firms, this fact alone does not
invalidate [the statute]. If it did, all affirmative action programs would be
unconstitutional because of the burden upon non-minorities."100
Narrow tailoring does permit certified firms acting as prime contractors to
count their self -performance towards meeting contract goals, if the study finds
discriminatory barriers to prime contract opportunities and there is no
requirement that a program be limited only to the subcontracting portions of
contracts. The DBE program regulations provide this remedy for discrimination
against DBEs seeking prime work,101 and the regulations do not limit the appli-
cation of the program to only subcontracts.102 The trial court in upholding the
95. Sherbrooke, 345 F.3d. at 973.
96. 49 C.F.R. §26.87.
97. See Engineering Contractors Assoc. of South Florida, Inc. v. Metropolitan Dade County, 943 F.Supp. 1546, 1581-1582 (S.D.
Fla. 1996) ("Engineering Contractors I") (County chose not to change its procurement system).
98. Concrete Works IV, 321 F.3d at 973; Wygant, 476 U.S. at 280-281; Adarand VII, 228 F.3 at 1183 ("While there appears to
be no serious burden on prime contractors, who are obviously compensated for any additional burden occasioned by
the employment of DBE subcontractors, at the margin, some non -DBE subcontractors such as Adarand will be deprived
of business opportunities"); cf. Northern Contracting II, at *5 ("Plaintiff has presented little evidence that is [sic] has suf-
fered anything more than minimal revenue losses due to the program.").
99. Rowe, 615 F.3d at 254 (prime bidder had no need for additional employees to perform program compliance and need
not subcontract work it can self -perform).
100. Western States, 407 F.3d at 995.
101. 49 C.F.R. § 26.53(g) ("In determining whether a DBE bidder/offeror for a prime contract has met the contractor goal,
count the work the DBE has committed to perform with its own forces as well as the work that it has committed to be
performed by DBE subcontractors and suppliers.").
102. 49 C.F.R. § 26.45(a)(1).
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City of Fort Worth Disoarity Study 2020
Illinois DOT'S DBE program explicitly recognized that barriers to subcontracting
opportunities also affect the ability of DBEs to compete for prime work on a
fair basis.
This requirement that goals be applied to the value of the
entire contract, not merely the subcontracted portion(s), is not
altered by the fact that prime contracts are, by law, awarded to
the lowest bidder. While it is true that prime contracts are
awarded in a race- and gender -neutral manner, the Regulations
nevertheless mandate application of goals based on the value
of the entire contract. Strong policy reasons support this
approach. Although laws mandating award of prime contracts
to the lowest bidder remove concerns regarding direct
discrimination at the level of prime contracts, the indirect
effects of discrimination may linger. The ability of DBEs to
compete successfully for prime contracts may be indirectly
affected by discrimination in the subcontracting market, or in
the bonding and financing markets. Such discrimination is
particularly burdensome in the construction industry, a highly
competitive industry with tight profit margins, considerable
hazards, and strict bonding and insurance requirements.103
6. Examine the Duration and Review of the Program
Race -based programs must have duration limits. A race -based remedy must
"not last longer than the discriminatory effects it is designed to eliminate."104
The unlimited duration and lack of review were factors in the court's holding
that the City of Chicago's M/WBE construction program was no longer nar-
rowly tailored; Chicago's program was based on 14-year-old information,
which while it supported the program adopted in 1990, no longer was suffi-
cient standing alone to justify the City's efforts in 2004.105 How old is too old is
not definitively answered,106 but governments would be wise to analyze data
at least once every five or six years.
103. Northern Contracting 11, 2005 U.S. Dist. LEXIS 19868 at 74.
104. Adarand 111, 515 U.S. at 238.
105. BAGC v. Chicago, 298 F.Supp.2d at 739.
106. See, e.g., Associated General Contractors of Ohio, Inc. v. Drabik, 50 F.Supp.2d 741, 747, 750 (S.D. Ohio 1999) ("Drabik I")
("A program of race -based benefits cannot be supported by evidence of discrimination which is now over twenty years
old.... The state conceded that it had no additional evidence of discrimination against minority contractors, and admit-
ted that during the nearly two decades the Act has been in effect, it has made no effort to determine whether there is a
continuing need for a race -based remedy."); Brunet v. City of Columbus, 1 F.3d 390, 409 (6th Cir. 1993), cert. denied sub
nom Brunet v. Tucker, 510 U.S. 1164 (1994) (fourteen -year -old evidence of discrimination "too remote to support a com-
pelling governmental interest.").
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City of Fort Worth Disparity Study 2020
In contrast, the USDOT DBE program's periodic review by Congress has been
repeatedly held to provide adequate durational limits.107 Similarly, "two facts
[were] particularly compelling in establishing that [North Carolina's M/WBE
program] was narrowly tailored: the statute's provisions (1) setting a specific
expiration date and (2) requiring a new disparity study every five years."108
107. See Western States, 407 F.3d at 995.
108. Rowe, 615 F.3d at 253.
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III. CITY OF FORT WORTH '? S
BUSINESS DIVERSITY
ENTERPRISE PROGRAM
This chapter describes the City of Fort Worth's Business Diversity Enterprise program
and provides the results of interviews with business owners, stakeholder representa-
tives and City staff.
A. City of Fort Worth's Business Diversity Enterprise
Program Provisions
The City of Fort Worth's Business Diversity Enterprise (BDE) Ordinance No. 20020-
12-2011 (City Code at Chapter 20, Article X) and subsequent amendments govern
access to contracting and sub -contracting opportunities offered on the City's
locally funded contracts. The BDE Ordinance was adopted in 2011 to remedy the
effects of past underutilization of minority and women business enterprises in the
Fort Worth marketplace. A 2009 Availability and Disparity Study conducted by
Mason Tillman Associates, Ltd. and previous similar studies found disparities in the
City's utilization of Minority- and Women -owned Business Enterprises ("M/WBEs")
on contracts in the construction, goods and services and professional services
industries.
The BDE Ordinance outlines, in detail, the required business diversity initiatives for
locally funded contracts for construction, professional services, purchase agree-
ments and any other contracts that the City Council or City Manager determine to
be appropriate. The BDE Ordinance includes provisions for the following: certifica-
tion requirements; program goal setting process (purchases over $50,000); pro-
gram criteria for joint ventures; M/WBE Prime Contracts; Small Business
Enterprise (SBE) subcontracting; procurements less than $50,000; applicable con-
tracts; post award compliance; contract monitoring and reporting; exceptions and
waivers; program administration; sanctions and severability. The Ordinance does
not set an expiration date for the program but does require a review by the City
Council every five years to determine whether it remains necessary.
Based on the Ordinance's directives, the City has implemented a number M/WBE
and SBE program initiatives to promote competitive and fair contracting opportu-
nities.
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City of Fort Worth Disparity Study 2020
1. Administration of the City of Fort Worth's Business Diversity
Enterprise Programs
During the Study period, Fort Worth's M/WBE initiatives have been adminis-
tered by the Office of Business Diversity which reports to the newly created
Diversity and Inclusion Department under the City Manager, Deputy City Man-
ager and Assistant City Managers. It is the responsibility of the City Manager to
establish, implement and administer the regulations directed by the BIDE Ordi-
nance. The City Manager recommends an annual aspirational goal for M/WBE
participation. All goals for M/WBE contracting activity are reviewed and
approved by the City Council. A Minority and Women Business Enterprise Advi-
sory Committee, which is appointed by the City Council, serves in an advisory
role to review Availability and Disparity Study findings, help the City Manager
in implementing the program and to inform and make recommendations to
the City Manager and Council about program initiatives. The M/WBE Advisory
Committee is comprised of 18 representatives from Fort Worth area Cham-
bers of Commerce; partner organizations that promote the utilization and
growth of M/WBEs; a regional certification agency; community groups; and
internal City of Fort Worth Office of Business Diversity Division staff. Members
serve two-year terms and can serve no more than three consecutive two-year
terms.
The Business Development Manager administers the overall and day-to-day
implementation of the City's program. This includes developing and maintain-
ing procedures and outreach programs to ensure that M/WBEs are able to
compete on contracts. The Business Development Manager's Office maintains
a current listing of certified firms, oversees and enforces contract compliance
and monitoring, develops and distributes necessary forms and documents to
support the program, reviews contract performance, reports on the progress
of departments in achieving goals and issues annual and quarterly reports
reflecting progress in attaining the City's goal.
2. Certification and Program Eligibility Requirements for Business
Diversity Enterprise Programs
The City accepts certifications from the North Central Texas Regional Certifica-
tion Agency, Dallas/Fort Worth Minority Supplier Development Council, the
Women's Business Council — Southwest and the Texas Department of Trans-
portation.
A Minority Business Enterprise ("MBE") is defined as a "for -profit" indepen-
dent business concern of which 51 percent is owned and controlled by one or
more minority persons or at least 51 percent of the stock is controlled by one
or more minorities. A Women Business Enterprise ("WBE") is defined as a "for-
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City of Fort Worth Disparity Study 2020
profit" independent business concern of which at least 51 percent is owned by
one or more women or at least 51 percent of the stock is controlled by one or
more women. There is also a requirement for both MBE and WBE certifications
that management and daily business operations must be controlled by one or
more minorities or women who own the firm. Small Business Enterprises
("SBEs") must meet the Small Business Administration's size standards and
other general requirements as described in the code of Federal Regulations at
13 CFR 121.
Qualifying firms must be located within the market areas applicable to the six
county areas where the city spends 80 percent of its tax dollars. Those coun-
ties are Tarrant, Dallas, Denton, Johnson, Parker and Wise. Only firms with a
principal office in the market area will be counted towards the City's goals.
Qualifying businesses must also have a Significant Business Presence in the
Marketplace. This requires that businesses whose Principal Place of Business is
outside the Marketplace and whose location within the Marketplace has been
verified to be in existence for a minimum of 24 months and from which at least
20% of the business' full-time and part-time employees are based in the Mar-
ketplace.
Some City utility departments require vendor prequalification to perform
work. This includes all firms performing water/sewer work for the Water
department and lighting and paving firms performing work for the Transporta-
tion and Public Works department. Each department is responsible for setting
up the prequalification requirements and prequalifying vendors.
3. Business Diversity Enterprise Goal Setting and Program Elements
Subcontracting goals for M/WBEs are set by industry category. For projects
$50,000.01 and greater, overall goals are established in the areas of construc-
tion and professional services (excluding Architecture and Engineering) and
purchases of goods and services. These category specific goals are based on
the availability of M/WBEs in the City's marketplace as determined by the 2009
Disparity Study. Race and gender -neutral SBE subcontracting goals are set at
the City's discretion on a contract -by -contract basis for Architectural and Engi-
neering contracts.
• A 25 percent goal for MBE participation for construction contracts;
• A 15 percent goal for African -American participation for professional
contracts;
• A 25 percent goal for M/WBE participation for goods and non-
professional services.
• A 15 percent SBE participation for architectural and engineering services
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City of Fort Worth Disparity Study 2020
Annual goals must be based on the total dollars spent annually for construc-
tion, construction -related professional services, goods and services contracts;
and the availability of MBEs and WBEs to perform these contracts. Goals may
be adjusted if there is strong evidence to justify revision, upon review.
Individual subcontracting goals are set by the Office of Business Diversity. As
set forth by the BIDE Ordinance, any contract goal shall be reasonable, shall be
based upon the nature of the subcontracting and materials required to com-
plete the project, and MBE availability.
In addition to using the "standard" subcontracting goals, the City also offers a
Joint Venture option on eligible solicitations to encourage M/WBE participa-
tion in prime contracting opportunities where it is economically feasible. The
City and BIDE Ordinance highly encourage joint venture proposals to meet M/
WBE and SBE participation goals. Projects designated as "Joint Venture Pre-
ferred" receive an additional 20 points for bids that include a least one M/WBE
joint venture partner. To participate, both the prime and M/WBE and/or SBE
firm must submit an eligibility form for review and approval to the Office of
Business Diversity and be of different ethnicities and/or genders to the extent
practical. The joint venture M/WBE ownership percentage will be counted
towards the M/WBE subcontracting goal. Although proposers are not required
to submit a joint venture proposal, they must still meet the required M/WBE
or SBE subcontracting goal set for the project and do not receive any addi-
tional evaluation points.
Another program enhancement to encourage M/WBEs to take on prime con-
tracting work is the M/WBE Prime Contracting program for construction con-
tracts valued up to $100,000, and Professional Services and Architectural and
Engineering contracts up to $150,000. The eligibility of City contracts procured
using this program depends on the relative availability and degree of underuti-
lization of M/WBEs in the industry category. For these contracts, M/WBE pro-
posers will receive additional points during the consideration process and may
not subcontract more than 49 percent to non-M/WBEs. Although the BIDE
Ordinance only allows SBE goals on Architectural and Engineering contracts, it
allows the City at its own discretion, to also give additional points during the
consideration process to M/WBE proposers on A&E solicitations. In order to
accomplish the policy objective for prime participation, the City will ensure
that MBEs and WBEs, who propose as primes and demonstrate the requisite
experience and technical proficiency, are given strong and serious consider-
ation during the selection process.
The BIDE Ordinance also provides for a Small business Enterprise Subcontract-
ing Program, thereby allowing the City to establish goals on a contract -by -con-
tract basis to encourage participation of M/WBEs and small firms. The BIDE
Ordinance outlines specific requirements for SBE utilization documentation,
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City of Fort Worth Disoarity Study 2020
accepted certification standards and audit and sanctions for false representa-
tion for contracts solicited under the program. All proposals with an SBE goal
must include a detailed plan to address the goal, specify company information,
provide a detailed description of work to be performed by each SBE, provide
the tier level, the subcontract value or percentage for each SBE participant,
give the SBE level of commitment achieved, and information for all non-SBE
participants.
M/WBE and SBE utilization plans specifying how all elements of the work will
be performed and how the goals met are required for all solicitation types,
although the timing of their submission varies based on the method of solicita-
tion.109 For all proposal types, if M/WBE or SBE participation information is not
submitted or a GFE explanation is not provided, the proposer will be deemed
to be non -responsive. If the goal cannot be met, the proposer must document
that at least two attempts were made using two of the four methods of con-
tact, or that at least one successful contact was made using one of the four
contact methods, in order to be deemed responsive to the Good Faith Effort
requirement. Regardless of the method, which includes email, fax, regular mail
and telephone calls, the submitted documentation must contain the firm
name, date and time contacted and the outcome of the contact.
For all program solicitation types, with the exception of some joint venture and
Design Build contracts, the BIDE Ordinance does not allow proposing certified
MBE, SBE or WBE firms to count themselves or their subsidiary -owned compa-
nies towards established goals. If allowed by the Office of Business Diversity,
the amount equal to the percentage participation in the joint venture can be
counted towards the goal. For Design -Build contracts, certified SBE design
primes may be able to count their participation towards the SBE goal. The pro-
gram also requires that all businesses must be certified either at the time of
bid or prior to recommendation of award, in order to be counted towards the
goal.
A waiver may be requested by the contracting department through the Office
of Business Diversity prior to the solicitation. Waivers are requested by submit-
ting in writing or a departmental waiver form, prior to submitting the bid or
proposal. There are five reasons that are taken into consideration in granting a
waiver: sole source purchases; the infeasibility of using a subcontractor or sup-
plier because of the contract requirements; the immediacy of contract fulfill-
ment required as a result of a public or administrative emergency; the lack of
available M/WBE or SBE contractors or suppliers; and the unwarranted risk on
the City or undue delay in acquiring the goods and services. Denials can be
appealed to the City Manager.
109. There is variation on timing of when the utilization plan must be submitted. 5 days from proposal date for JVs. For other
contract types, it's with the proposal.
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As governed by the BIDE Ordinance, there are no goal requirements for con-
tracts with values of $50,000 or less. Each department with purchasing author-
ity is encouraged to solicit three bids of which two must be with M/WBEs for
solicitations between $3,000 and $50,000 to be in compliance with the DBE
Ordinance.
Each department must:
• Submit a quarterly M/WBE participation report to the Office of Business
Diversity;
• Designate at least one person to serve as a primary liaison to ensure M/
WBEs are solicited for purchases;
• Utilize the Office of Business Diversity list of potential vendors;
• Identify and track the use of M/WBEs;
• Evaluate whether there is consistent solicitation of at least two M/WBEs
when there is availability and a minimum of three bids are required;
• Evaluate whether M/WBEs are consistently solicited to the fullest extent
possible when only one bid is required; and
• Rotate the use of M/WBEs to the full extent practical to spread the overall
participation across M/WBEs.
4. Capacity Building, Outreach Activities and Training
To assist in increasing participation of MBEs, the City plans to roll out a Mentor
Protege Program for certified MBEs in construction or construction -related
services. The City's program will pair MBE firms with larger prime contractors
who have been in business at least seven years, have experience in design,
construction, or construction -related professional services as a primary busi-
ness, have worked or bid on City projects, have documented business pro-
cesses and procedures, have a local presence in the six county marketplace
and are distinct and separate from the prospective protege. The Protege must
be an MBE -certified firm whose primary business is to perform design, con-
struction or related professional services, be a separate and distinct business
entity from the Mentor perform a commercially useful function and have a
local presence in the six -county marketplace. The Mentor will assess the needs
of the Protege and partner with their Protege on projects to provide on -the -
job -training. The City plans to apply several criteria that a Protege must meet
to successfully graduate from the program, such as increasing revenues, hiring
additional employees, receiving an increase in bonding capacity, receiving bid
awards on projects, and graduating from the Beck Construction School in Fort
Worth.
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The City does not directly offer business development programs. However, in
recognition of the need to provide more assistance in developing MBE capac-
ity, the Office of Business Diversity has partnered with other City departments
and Tarrant County agencies to offer several important services. The City has
entered into a three-year partnership with the Beck School of Constructionlio
to provide training and education in the construction industry and the bidding
process. To be eligible, MBEs must have been in business for at least one year
and have gross annual revenues of $100,000 or greater.
Additionally, the Office of Business Diversity hosts bi-monthly Vendor Informa-
tional Forums, quarterly certification workshops and quarterly Requests for
Proposals ("RFP"), Requests for Qualifications ("RFQ'), Invitations to Bid
("ITB"), and Best Value Solicitation workshops. The City has a three-year part-
nership agreement with the Beck Group to host the Beck School of Construc-
tion in Fort Worth, TX. In addition, the City has advocacy partners that host
events that support business and economic development of M/WBEs, such as
the Dallas/Fort Worth Minority Business Development Council, US Pan Asian
American Chamber of Commerce, Fort Worth Hispanic Chamber of Com-
merce, Fort Worth Metropolitan Black Chamber of Commerce, Regional Black
Contractors Association, and Regional Hispanic Contractors Association.
The City has also formed informal partnerships with several firms specializing
in insurance, bonding, and financing to provide information and to educate M/
WBEs. These partner firms also provide credit counseling, investing and busi-
ness consulting and access to a network of prime and subprime lenders.
Through the Fort Worth Business Assistance Center, the City hosts and partici-
pates in a number of outreach events that include networking sessions, lun-
cheons, informational meetings, and pre -bid conferences. The Office of
Business Diversity hosts bi-monthly Vendor Informational Forums to M/WBEs
in partnership with DFW Airport, Tarrant County, the Fort Worth Independent
School District and the City of Arlington to provide information about bid
opportunities and how firms can meet bid requirements. The Office hosts
quarterly certification training sessions to educate M/WBEs about their certifi-
cation options and process, in addition to workshops specifically designed to
help vendors prepare successful bid responses and proposals.
To increase the success of community outreach, the City also actively partici-
pates in Tarrant County and DFW Airport sponsored trade fairs and match
making events bringing together primes and M/WBEs. The City partners with
local organizations such as the Regional Hispanic Association and Women's
Business Council -Southwest to offer workshops and to provide contracting
information to their members.
110. The Beck School of Construction is a partnership between the City and a private firm, the Beck Group.
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The City regularly engages the media and communicates opportunities and
policy updates via its website. Bi-weekly email alerts are sent out through City
News on behalf of the Office of Business Diversity announcing upcoming
events and upcoming bids. A video on doing business with the City of Fort
Worth is posted to the Office of Business Diversity's website.
Staff training includes attendance at the annual American Contract Compli-
ance Association's, annual National Training Institute1ll and Airport Minority
Advisory Council conferences. Special training is also available by the Texas
Unified Certification Program for the U.S. Department of transportation's Dis-
advantaged Business Enterprise program and the City vendor of its electronic
data collection and monitoring system, B2Gnow, Inc. Staff can also attend the
Beck and Turner Schools of Construction and training offered by other vendor
groups.
To assist potential proposers and bidders, the Purchasing department provides
bid information on its website. Open bids and request for proposals can be
accessed through the Purchasing website pages using the PeopleSoft Portal,
Star Telegram newspaper, City News releases and email if the vendor is regis-
tered in the City's vendor database. The BIDE Ordinance also requires the indi-
vidual contracting departments use the City's website, email and professional
business and trade associations and other tools to advertise and notify M/
WBEs and SBEs of prospective contracting opportunities.
S. Post Award Procedures and Contract Monitoring
In 2017-2018, the City installed the B2Gnow electronic data collection and
monitoring system to track payments. The BIDE Ordinance sets forth a detailed
process for monitoring, resolving and escalating contract non-compliance
during the term of the contract, as well as any requested changes in M/WBE or
SBE participation. Any unjustified modification or deletion of participation by
an M/WBE or SBE shall be deemed as a material breach of contract and may
result in debarment.
If the Office of Business Diversity determines that a contractor is out of compli-
ance with M/WBE or SBE contract utilization, the Office will notify the con-
tracting department and the contractor and attempt to resolve non-
compliance through reconciliation. If the non-compliance cannot be resolved
at this step, then the Office, along with the contracting department, will sub-
mit written recommendations to the Legal Department. A finding of non-com-
Ill. The Senior Contract Compliance Specialists ("CCSs") have obtained their Executive Certified Master Compliance Admin-
istrator (ECMCA) Certification from Morgan State University through ACCA. This certification is the highest and most rec-
ognized certification in the country and symbolizes that one is an expert in the field.
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pliance by the Legal Department will result in sanctions being imposed on the
contractor.
B. Experiences with the City of Fort Worth's Business
Diversity Enterprise Program
To explore the impacts of race- and gender -neutral contracting policies and proce-
dures and the implementation of the City's M/WBE program, we interviewed 80
individuals about their experiences and solicited their suggestions for changes.
The following are summaries of the topics discussed. Quotations are indented and
have been edited for readability. They are representative of the views expressed
during the group interviews.
1. Outreach to M/WBEs and small firms
While the City does attend vendor fairs hosted by other local area agencies,
several owners requested additional targeted meetings only for Fort Worth
opportunities that could be tailored to specific industries, such as engineering.
Staff with decision -making authority need to participate.
I don't get notices from the City. I have to find out through all
the other networks that I work through.
How much effort are you putting into to try to reach out to [M/
WBEs for specific projects]?
For all the procurement opportunity fairs that go on, those are
really not the people making the decisions. Those are the
people that are executing their policy and their programs, how
to do business. So, even if you go to those, the chances are slim
that you would actually meet the person making the decision.
Several general contractors agreed that the City should host outreach events
targeted to specific industries, like construction.
They're more of the professional services type for cities, which
is fine, but for the benefit of the actual contractors, they were
kind of marginal.
[Targeted sessions are] something the City should do on a
quarterly basis.
There was some frustration on the part of City staff that more
M/WBEs do not take advantage of outreach events.
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We publicize outreach events, especially on the B2G[now]
system and through our website and everything. So, [we] just
had a big project that nobody showed up. It was highly
publicized, and nobody showed up except one vendor.
Vertical construction, yes there is outreach being done because
you have the big GCs ... those do have plenty of outreach. Is it a
requirement? No, but most of the time they're going to do it
because they're trying to meet that goal. Because if not, those
are best value [contract]s. We're going to end up ranking them
and scoring them on [outreach].... Our GCs happen to be
different that are bidding on Fort Worth work are different than
the ones that are bidding on Dallas [work].... Now that we have
the B2G[now] system, we're doing more outreach out of that
system, but we can't hold everybody's hand.
2. Pre -award contract specifications, requirements and processes
Some small firms found it difficult to procure the insurance mandated for spe-
cific solicitations.
When it comes to having a first dibs on a contract, everything
that we have looks perfect. It looks ideal until we get to the
insurance part. And so, I don't know how we work around that.
Often, the large size of City contracts was another impediment to M/WBEs.
Sometimes, they will lump those small little projects and two
bigger projects into bigger companies' things, and you're like,
"What happened to that $20,000 one that you had me do all
this work on? Where'd it go?"
Long wait times between notice of award and notice to proceed hurt M/WBEs
and small firms.
A lot of those small businesses can't sit and wait for four or five
months. So, they choose to go somewhere else.... They don't
have any capital and most of them were working week to week
or month to month anyway and they can't do that. So, it makes
it hard to build a business up working for the City.
A few times we've had to go in and redo the paperwork and
either replace them or explain to them, you put a narrative
together, explain why that company, couple of them have gone
out of business. And they just weren't available. We couldn't
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find anybody to do it at that price. And the City has been
accommodating.
3. Obtaining work through the program
Most M/WBEs reported that the program helps them to obtain work on con-
tracts for which they can be counted towards the goals.
I do commend Gwen and Robert's team. They've been doing
this a lot more. They've been a lot more effective and do that
for that reason. Because they will do this, and they will get that.
And so, I think we need that leadership to go out more.
We've done a lot of work for the City, and proud to be Fort
Worth -based.
The City communicates that it takes the program seriously and expects bidders
to comply with all requirements.
Nothing is worse than hiring a minority or woman owned firm
just for the hell of doing it. I mean, there's nothing worse to a
team than that. And it loses the credibility of the program as a
whole.
If you promise, if they have a minimum participation, they will
track it and they will hold you to it.
Many M/WBEs stated that the City's policy that the program only applies to
subcontracting work hurts their ability to become prime vendors and grow
their firms.
If you're a minority prime, you do not get credit for being a
prime. You only get points in credit for being a sub. It's like,
what are you advocating for [with this program]?
You cannot use your percentage.
We don't get any credit.
We're typically prime on projects and so our percentage for the
City ... does not count towards their goal.... [Because of] that,
my MBE [certification] has never been a benefit.... The whole
goal of these programs [should] be to promote firms to better
themselves, to improve what they can do to become a bigger
firm.
The transition from, basically, sub to general was a lot of
frustration, I guess. Because when you're working for a general
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contractor, you're at the mercy of their schedules, not your
own. With road projects, you tend to see things start, and then
they will stop. You've got layers of subcontractors in there. You
got dirt contractors, you got a utility contractor, you got the
pavement contractor, and then it's usually us there on the very
end. Well, scheduling things as a sub, in a perfect world, it's
easy to do, but then throw in this contractor being late,
franchise utilities being in the way. All of a sudden, the paving
contractor can't get there. All these scenarios, and then we're
just chasing, we were constantly chasing our tail.
Another barrier is that experience gained through work for a prior employer is
often is not counted toward the qualifications for award.
Once you start your own company, you have that clean slate. If
you could use kind of the equivalent experience under a
previous firm that would help.
4. Payment
The City was generally reported to pay its prime contractors promptly. There
were few complaints about payment by prime contractors to subcontractors.
Very positive things about the City of Fort Worth structure now
is their payment, their turnaround on pay. They have, for the
construction projects, paving civil type projects, they have twice
monthly billing. That is very unusual in this industry. Then the
other thing too is, once you submit application for payment,
well then, generally, in about 7 to 10 days, you got a check.
We've never had a problem 15 years.
We haven't had a problem with them yet. If anything, they
would, they're the greatest guys we've ever worked.... As far as
working with Fort Worth, we couldn't ask for a better client.
Change orders, however, can add long delays to payments. Small firms' lack of
working capital, which reduces their ability to finance delays, imposes burdens
on general contractors, too.
We all had change orders that didn't get paid for nine, 10, 12
months that a subcontractor did for us, a minority
subcontractor did for us. We went ahead and paid them
because they can't afford that. I mean, they'd go out of
business.... Most of us are taking care of those guys because we
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want him to stay in business so we can use them. So, they're
not suffering. Who's suffering is us.
I may not be as generous as these guys. There's a couple of
people that we do a lot of business with [we pay early]. But for
the majority of them, we [pay when we get paid].
S. Small business assistance initiatives
While the City does make available information on area supportive services
and technical assistance, as well as provide information on its website on how
to do business with Fort Worth, some M/WBEs welcomed additional assis-
tance for their businesses, such as programs on how to estimate jobs, comply
with City paperwork, effective marketing, etc.
As far as the preparation goes making sure that those firms do
have the education that they need. Incorporating some type of
preparation programs to get them set up.... You have to build
those things and it takes time. For the City to incorporate those
things would be very beneficial to the contractors.
Another approach is a mentor -protege initiative.
I kind of see a mentor protege program, as kind of like an
internship. I'm not going to make money off of those projects.
But if I know that I'm working on this project and I've got that
valuable past performance, that's going to have a dollar value
to me later on. So, if I can spend my time and effort working
with a company on some projects and I don't have to go out
trying to network or trying to get my foot in the door, then
that's a value to me. But there again, it's got to have that
accountability and those measurables.
One M/WBE had benefited from such a relationship.
I have a company that I've been working with that they've been
a really good mentor to me because what they do is, they offer
me office space whereas I don't have to pay for office space.
And so, it's kind of like I work with them and they show me
different things and vice versa because I had background in
some areas that they don't really have a lot of knowledge. That
to me is like a really good relationships because you get more,
you really get something out of it.
While generally supportive of the concept, at least one general contractor
urged caution.
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More or less tried to mentor somebody. Much more difficult
now than it used to be. We just don't have the time that we
used to have.
6. Meeting M/WBE contract goals
While not always easy, most prime firms were able to meet M/WBE contract
goals on City projects.
I do have minority subs, and I've got some great ones. I'm not
going to share them with y'all because I want to keep them for
myself. I've got truckers that they're minority truckers. They
take care of their business, and they pay their subs, and they do
those things. We just, we don't even, that's not even a category
that we send out for anymore because I know I've got two of
them that I can count on. All the trucking in the job is going to
two minority guys, and that's going to count towards our
percentage, towards our goal. We've got landscapers we do the
same thing with. I've got a couple now. I found another one
through the process of the good faith. We found another one,
so now I've got two. I wish I had a utility guy, and I wish I had a
paving guy.
However, smaller general contractors found compliance with program require-
ments to be burdensome and often challenging.
Most of the public work, construction work in Fort Worth, the
general contractors that are in my organization do a lot of that
work. And we're not big companies. There's four people that
work in my office. Some of the other ones, maybe they have
seven people. Some of them maybe have two people that work
in their offices. So, we're not capable of doing outreach. So,
what we do is we do what the City requires us to do, which is
send out our letters, our emails. I don't know what these big
companies that are doing on these major over a hundred
million -dollar projects, but the kind of work that we do for the
City of Fort Worth, we use MBE firms for trucking, for
landscaping, for concrete work.
Some prime vendors report that they use M/WBEs regardless of whether
there is a goal on the solicitation.
We're not just using them in Fort Worth that has the program.
We're using them in every city that we work with in the
metroplex, these same subcontractors. So, it's not a deal where
we use them just where there's a goal set.... You're not even
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seeing all the participation because some of them haven't taken
the time to register because they're getting so much work
without registering. They're just not going through that. They
don't see the purpose for going through the paperwork. So, I
would say on the level that Fort Worth puts out their
construction projects, the pool of MBE contractors or WBE
contractors that are out there are getting used.... I've seen
them using MBE contractors all over the metroplex when it's
not required of them in this City.
Bidders raised questions about how the City sets contract goals and whether
the goals are reasonable and achievable.
Many times, there is no vendors in there. There's no women,
there's no minorities. And so, if those are the services that are
being asked for, are we putting realistic goals out there?
Because are we setting those reps up for failure? We've got to
take a look at that.
Now goals are difficult to meet, so you're probably going to go
good faith effort 90 percent of the time because they tend to
set the goals too high for what's out there. And I would say one
of the reasons you have a hard time finding MB firms to meet
goal is because they would also rather work in the commercial
or private industry than worked for the city of Fort Worth
because of all the issues you have over here working for them.
So, I don't think there's firms out there that could do the work.
They just rather work for the lowest hanging fruit.
Some construction prime firms lamented the exclusion of White women from
the program, which was recommended by the City's prior disparity study.
There are some good women owned businesses ... which makes
it more cumbersome on us to achieve that goal, which is kind of
defeating the City's purpose to cut their nose off to spite our
face.
Several prime contractors reported that the list of certified firms that can be
used to meet the goal contains many firms that either do not do the type of
work listed in the directory or have even gone out of business.
[The City's] biggest issue with MBE is that their lists have 150
people on there that supposedly do concrete work. But maybe
three or four of them actually want to work on a City project
and half of them have closed their doors. And so, I've told them
for years, you need to clean up that list because everybody just
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wants to sign up for everything that they could possibly do, but
then they really don't want to do that work. So, get a list that
actually has people that want to do City work and in the
categories that they're actually gonna bid on. And then that
way, maybe the list is instead of being 250 people, maybe we've
got 30, 40, 50 people to reach out to and then you might
actually be able to develop a relationship with them.
A quick example: I'll put in for this last week and it was for
[large] drainage ... [and] one of the names came back was a
lawn and sprinkler company.
Some majority firm participants expressed frustration that M/WBEs do not suf-
ficiently market themselves to prime contractors or respond to requests for
subcontractor quotations.
If you're not getting used and you're on the mailing list if they
have, if you want to do work, respond, make contact, and build
relationships, it is all about relationship just like they said. I
mean, I barely have time to do everything I want to get done in
a day's time. So, I'm not out actively looking for new people to
bid my work, but I'll take a number from anybody. You come
knock on my door and want to do business. I've never not let
anybody come into my office that's knocked on my front door.
My secretary is told that anybody that takes the time to come
by is welcome to come to my office and sit down and discuss
things. And if you're qualified to do work, you're going to do
work with me. And I think most of the people in my
organization feel that same way.... It's getting that introduction
I think that is the problem. And it's got to be both sides.
Unless [the City] make[s] those subs on their list respond to us,
we'll never have a relationship.
You sit out a hundred emails and you might get one quote back.
So, that's our biggest problem is you never get any quotes.
Unless [the City] make[s] those subs on their list respond to us,
we'll never have a relationship.
You sit out a hundred emails and you might get one quote back.
So, that's our biggest problem is you never get any quotes.
It's much more lucrative, easier for all the subcontractors to
work on the private side. The economy's good, everything
booming. And so, you know, they may be on the list and they
keep updated on the list, but they have no desire to do this one.
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And so, it's putting an unfair burden on the contractors that are
doing the City work with goals that are unreasonable and the
reporting process.... Either drop the goal or the City has to make
a concerted effort to find interested contractors.
[You] waste all your time and money for something that they
know is totally unrealistic to begin with. And we're using
everybody, every reputable contractor that we have and we
pay ahead to keep on staff and so it's hard to back the MBE
program that is obviously not working in our benefit nor theirs.
Another barrier is the City's requirement that some sub trade firms must be
prequalified to work as subcontractors on City jobs.
We have a lot of them that they're on the minority list, but
there's another list in Fort Worth and you have to be a pre -
qualified contractor to perform work there.... I've got a couple
that I would be willing to use anytime, but they're not on the
[prequalified list].
[It] would help us a lot and would help them get better [for the
Diversity and Inclusion Office to know which firms are
prequalified].
The quick turnaround time for program compliance documentation was men-
tioned by some contractors as unreasonable.
Their MBE program was very successful in the past.... But they
changed some things, like our time to report is less than two
days. That's not enough time. Originally the purpose it was to
speed up the award process. Well, it's done nothing.
[The City has] been pretty much accommodating with
everything except time. If you don't meet their deadlines, that if
it's in the ordinance, they're not accommodating at all. They're
not flexible at all. But, anything else, I think I've always had
pretty good [results].
C. Conclusion
Overall, the City of Fort Worth's business diversity initiatives were reported to be
helpful. Certified firms have received work as a direct result of contract goals, and
most stated that without the implementation of contract goals their opportunities
would be greatly diminished or non-existent. Prime vendors found meeting the
goals challenging, but most were able to include minority and women businesses
on their contracts. However, both M/WBEs and prime vendors thought the City
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City of Fort Worth Disparity Study 2020
could do more to alleviate obstacles in program requirements and to help M/
WBEs do business with the City. Suggested improvements include providing more
notification about contract opportunities; reducing contract size and complexity;
relaxing provisions that prevent subcontractors from moving into the role of prime
vendors; providing additional technical assistance and supportive services; reduc-
ing prequalification requirements; reinstating full program eligibility for WBEs; and
reducing burdensome compliance provisions.
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IV. UTILIZATION,, AVAILABILITY
AND DISPARITY ANALYSES FOR
THE CITY OF FORT WORTH
A. Contract Data Overview
We analyzed contract data for the fiscal years 2013 through 2018 for the City's
contracts. To conduct this analysis, we constructed all the fields necessary for our
analysis where they were missing in the City's contract records (e.g., industry type;
zip codes; NAICS codes of prime contractors and subcontractors; non -certified
subcontractor information, including payments, race, gender; etc.). The resulting
Final Contract Data File ("FCDF") for analysis contained 315 prime contracts, with a
total net paid amount of $658,947,162. Subcontractors received 1,841 contracts.
Prime contractors received $440,065,101 of the net paid amount; subcontractors
received $218,882,055 of the net paid amount.
The FCDF was used to determine the geographic and product markets for the anal-
yses. It was also used to estimate the utilization of M/WBEs on the City's contracts.
We then used the FCDF, in combination with other databases (as described
below), to calculate M/WBE unweighted and weighted availability in the City's
marketplace by funding source and contract type.
For purposes of goal setting, the availability estimates are weighted by the City's
actual spending patterns, as determined by the NAICS codes it utilized. Weighting
availability results is a more accurate picture of which firms are available to partic-
ipate in the agency's opportunities. For example, high availability in a NAISC code
in which minimal dollars are spent would give the impression that there are more
M/WBEs that can perform work on agency contracts than are actually ready, will-
ing and able. Conversely, a low availability in a high dollar scope would understate
the potential dollars that could be spent with M/WBEs.112
112. This is why the USDOT "Tips for Goal Setting" urges recipients to weight their headcount of firms by dollars spent. See
https://www.transportation.gov/osd bu/disadvantaged-busi ness-enterprise/ti ps-goa I-setting-disadvantaged-busi ness-
enterprise.
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B. The Product and Geographic Markets for the City of
Fort Worth's Contracts
As discussed in Chapter II, a defensible disparity study must determine empirically
the industries that comprise the City's product or industry market. The accepted
approach is to analyze those detailed industries, as defined by 6-digit North Amer-
ican Industry Classification System ("NAICS") codes113 that make up at least 75
percent of the prime contract and subcontract payments for the study period.114
1. The Unconstrained Product Market for the City's Contracts
We began our analysis with all of the NAICS codes contained in the City's FCDF.
There are 132 NAICS codes.
Table 4-1 presents the 15 NAICS codes that represented 90 percent of the
value of the FCDF. Table D-1 in Appendix D lists all 132 NAICS codes.
Table 4-1: Industry Percentage Distribution of Contracts by Dollars
All Contracts
Pct Total
Cumulative Pct
NAICS
NAICS Code Description
Contract
Total Contract
Dollars
Dollars
237310
Highway, Street, and Bridge Construction
31.3%
31.3%
Water and Sewer Line and Related Structures
237110
28 2%
59.5%
Construction
Commercial and Institutional Building
236220
7 7%
67.3%
Construction
541330
Engineering Services
5.1%
72.4%
Specialized Freight (except Used Goods) Trucking,
484220
2 8%
75 2%
Local
Electrical Contractors and Other Wiring
238210
2 8%
78 0%
Installation Contractors
Metal Service Centers and Other Metal Merchant
423510
1 9%
79 9%
Wholesalers
237990
Other Heavy and Civil Engineering Construction
1.8%
81.7%
113. www.census.gov/eos/www/naics.
114. National Academies of Sciences, Engineering, and Medicine 2010, Guidelines for Conducting a Disparity and Availability
Study for the Federal DBE Program. Washington, DC: The National Academies Press. https:Hdoi.org/10.17226/14346.
("National Disparity Study Guidelines").
66 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disoarity Study 2020
Pct Total
Cumulative Pct
NAICS
NAICS Code Description
Contract
Total Contract
Dollars
Dollars
238910
Site Preparation Contractors
1.4%
83.2%
Plumbing, Heating, and Air -Conditioning
238220
1 4%
84.6%
Contractors
423840
Industrial Supplies Merchant Wholesalers
1.3%
85.9%
324121
Asphalt Paving Mixture and Block Manufacturing
1.3%
87.1%
561730
Landscaping Services
1.2%
88.3%
327320
Ready -Mix Concrete Manufacturing
1.1%
89.4%
Brick, Stone, and Related Construction Material
423320
1.1%
90.4%
Merchant Wholesalers
TOTAL00.0,
a. Agency spending across an additional 117 NAICS codes comprised 9.6 percent of all spending. A chart
of all of these NAICS codes is in Appendix D.
Source: CHA analysis of the City data.
2. The City of Fort Worth's Geographic Market
The courts require that a local government limit the reach of its race- and gen-
der -conscious contracting program to its geographic market area."' This ele-
ment of the analysis must be empirically established.116 To determine the
relevant geographic market area, we applied the standard of identifying the
firm locations that account for at least 75 percent of contract and subcontract
dollar payments in the contract data file. 117 Location was determined by ZIP
code and aggregated into counties as the geographic unit.
The State of Texas contained 97.3 percent of the contract dollars in this mar-
ket. Three counties —Tarrant, Dallas, and Johnson - capture 92.6 percent of the
Texas dollars (and 90.1 percent of the FCDF). Table 4-2 lists how these dollars
were distributed across these three counties in Texas. Tarrant, Dallas, and
Johnson Counties comprise the geographic market.
115. City of Richmond v. J.A. Croson Co., 488 U.S. 469, 508 (1989) (Richmond was specifically faulted for including minority
contractors from across the country in its program based on the national evidence that supported the USDOT DBE pro-
gram).
116. Concrete Works of Colorado, Inc. v. City and County of Denver, 36 F.3d 1513, 1520 (10th Cir. 1994) (to confine data to
strict geographic boundaries would ignore "economic reality").
117. National Disparity Study Guidelines, p. 49.
O 2020 CH Advisors, Inc., All Rights Reserved. 67
City of Fort Worth Disparity Study 2020
Table 4-2: Distribution of Contracts in the City of Fort Worth's Geographical
Market
a. The rest of the counties in Texas captured 7.4 percent of
the City's spending in the state.
Source: CHA analysis of the City data.
3. The Utilization of M/WBEs on the City of Fort Worth's Contracts
Having determined the City's product and geographic market area (and, there-
fore, the agency's constrained product market), the next step was to deter-
mine the dollar value of the City's utilization of M/WBEs118 as measured by
payments to prime firms and subcontractors and disaggregated by race and
gender. The City did not collect data for all subcontractors, as well as other
records critical for the study. We therefore had to obtain missing data from
prime vendors, a lengthy process, and reconstruct other contract records,
including researching the race and gender ownership of subcontractors and
assigning NAICS codes to those firms.
Limiting the unconstrained product market to the boundaries of those three
counties reduced the number of NAICS codes further analyzed in this study to
114.
Tables 4-3 through 4-5 present data on the utilization of total contract dollars
in the constrained product market. (Note the contract dollar shares in Table 4-
3 are equivalent to the weight of spending in each NAICS code. These weights
were used to transform data from unweighted availability to weighted avail-
ability, as discussed below.)
118. We use the terms "M/WBEs" to include firms owned by racial or ethnic minorities and white females that are not certi-
fied as M/WBEs by an agency recognized by the City. This casts the "broad net" required by the courts, as discussed in
Chapter II.
68 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
Table 4-3: NAICS Code Distribution of Contract Dollars
NAICS
NAICS Code Description
Total Contract
Dollars
Pct Total
Contract ..
237310
Highway, Street, and Bridge Construction
$191,813,920.00
32.31998%
237110
Water and Sewer Line and Related Structures
$171,981,536.00
28.97829%
Construction
236220
Commercial and Institutional Building
$50,255,388.00
8.46786%
Construction
541330
Engineering Services
$30,722,446.00
5.17663%
238210
Electrical Contractors and Other Wiring
$17,660,142.00
2.97567%
Installation Contractors
484220
Specialized Freight (except Used Goods)
$10,439,083.00
1.75895%
Trucking, Local
423510
Metal Service Centers and Other Metal
$10,409,025.00
1.75388%
Merchant Wholesalers
237990
Other Heavy and Civil Engineering
$g 975,282.00
1.51230%
Construction
238910
Site Preparation Contractors
$8,511,074.00
1.43409%
324121
Asphalt Paving Mixture and Block
$8,249,911.00
1.39008%
Manufacturing
327320
Ready -Mix Concrete Manufacturing
$7,178,609.00
1.20957%
238220
Plumbing, Heating, and Air -Conditioning
$7 115,119.00
1.19887%
Contractors
423840
Industrial Supplies Merchant Wholesalers
$6,861,563.50
1.15615%
561730
Landscaping Services
$6,840,401.50
1.15258%
423320
Brick, Stone, and Related Construction
$5,794,536.50
0.97636%
Material Merchant Wholesalers
238110
Poured Concrete Foundation and Structure
$4,758,905.50
0.80186%
Contractors
238120
Structural Steel and Precast Concrete
$4,434,271.00
0.74716%
Contractors
Electrical Apparatus and Equipment, Wiring
423610
Supplies, and Related Equipment Merchant
$4,121,663.75
0.69449%
Wholesalers
238990
All Other Specialty Trade Contractors
$3,860,757.25
0.65052%
484110
General Freight Trucking, Local
$3,001,637.75
0.50577%
O 2020 CH Advisors, Inc., All Rights Reserved. 69
City of Fort Worth Disparity Study 2020
NAICS
NAICS Code Description
Total Contract
Pct: Total
Dollars
Contract Dollars
561720
Janitorial Services
$2,269,689.75
0.38243%
238140
Masonry Contractors
$2,037,837.88
0.34337%
238310
Drywall and Insulation Contractors
$1,785,638.00
0.30087%
238190
Other Foundation, Structure, and Building
$1,688,673.00
0.28454%
Exterior Contractors
238160
Roofing Contractors
$1,669,256.75
0.28126%
541370
Surveying and Mapping (except Geophysical)
$1 627,957.75
0.27431%
Services
Petroleum and Petroleum Products Merchant
424720
Wholesalers (except Bulk Stations and
$1,550,149.00
0.26119%
Terminals)
332312
Fabricated Structural Metal Manufacturing
$1,493,338.00
0.25162%
238390
Other Building Finishing Contractors
$1,366,806.75
0.23030%
561990
All Other Support Services
$1,233,056.75
0.20777%
444190
Other Building Material Dealers
$927,882.75
0.15635%
541380
Testing Laboratories
$903,851.81
0.15230%
532412
Construction, Mining, and Forestry Machinery
$726,447.31
0.12240%
and Equipment Rental and Leasing
238350
Finish Carpentry Contractors
$604,764.69
0.10190%
237120
Oil and Gas Pipeline and Related Structures
$596,773.44
0.10055%
Construction
562910
Remediation Services
$585,738.62
0.09869%
423720
Plumbing and Heating Equipment and Supplies
$569,992.25
0.09604%
(Hydronics) Merchant Wholesalers
561440
Collection Agencies
$553,474.12
0.09326%
238330
Flooring Contractors
$521,310.00
0.08784%
238320
Painting and Wall Covering Contractors
$511,376.00
0.08617%
332999
All Other Miscellaneous Fabricated Metal
$463,835.16
0.07815%
Product Manufacturing
327332
Concrete Pipe Manufacturing
$463,053.75
0.07802%
423390
Other Construction Material Merchant
$457,513.78
0.07709%
Wholesalers
221330
Steam and Air -Conditioning Supply
$352,863.88
0.05946%
70 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
331511
NAICS Code Description
Iron Foundries
Total Contract
Dollars
$323,062.47
Pct: Total
Contract Dollars
0.05443%
524126
Direct Property and Casualty Insurance
Carriers
$306,515.00
0.05165%
238150
Glass and Glazing Contractors
$293,938.00
0.04953%
339950
Sign Manufacturing
$262,990.56
0.04431%
238290
Other Building Equipment Contractors
$256,878.86
0.04328%
212312
Crushed and Broken Limestone Mining and
Quarrying
$248,742.83
0.04191%
562111
Solid Waste Collection
$245,519.00
0.04137%
424710
Petroleum Bulk Stations and Terminals
$223,817.27
0.03771%
541191
Title Abstract and Settlement Offices
$216,451.41
0.03647%
238340
Tile and Terrazzo Contractors
$212,599.00
0.03582%
332618
Other Fabricated Wire Product Manufacturing
$193,400.00
0.03259%
561621
Security Systems Services (except Locksmiths)
$178,755.00
0.03012%
331110
Iron and Steel Mills and Ferroalloy
Manufacturing
$175,280.14
0.02953%
314999
All Other Miscellaneous Textile Product Mills
$175,243.00
0.02953%
326122
Plastics Pipe and Pipe Fitting Manufacturing
$163,046.22
0.02747%
541310
Architectural Services
$156,291.59
0.02633%
331210
Iron and Steel Pipe and Tube Manufacturing
from Purchased Steel
$145,409.14
0.02450%
333120
Construction Machinery Manufacturing
$141,031.80
0.02376%
541990
All Other Professional, Scientific, and Technical
Services
$126,971.90
0.02139%
454310
Fuel Dealers
$126,697.43
0.02135%
236210
Industrial Building Construction
$123,368.16
0.02079%
424590
Other Farm Product Raw Material Merchant
Wholesalers
$120,693.38
0.02034%
327410
Lime Manufacturing
$93,299.95
0.01572%
444120
Paint and Wallpaper Stores
$87,256.17
0.01470%
561311
Employment Placement Agencies
$80,000.00
0.01348%
541820
Public Relations Agencies
$76,486.95
0.01289%
O 2020 CH Advisors, Inc., All Rights Reserved. 71
City of Fort Worth Disparity Study 2020
NAICS
NAICS Code Description
Total Contract
Pct Total
Dollars
Contract Dollars
453998
All Other Miscellaneous Store Retailers
$75,020.71
0.01264%
(except Tobacco Stores)
423440
Other Commercial Equipment Merchant
$64,497.91
0.01087%
Wholesalers
423740
Refrigeration Equipment and Supplies
$57,297.53
0.00965%
Merchant Wholesalers
212321
Construction Sand and Gravel Mining
$54,333.36
0.00915%
213112
Support Activities for Oil and Gas Operations
$46,224.00
0.00779%
541320
Landscape Architectural Services
$41,000.00
0.00691%
541720
Research and Development in the Social
$40,961.62
0.00690%
Sciences and Humanities
321114
Wood Preservation
$38,171.88
0.00643%
541620
Environmental Consulting Services
$38,040.00
0.00641%
324110
Petroleum Refineries
$29,786.12
0.00502%
424690
Other Chemical and Allied Products Merchant
$27 584.00
0.00465%
Wholesalers
562991
Septic Tank and Related Services
$23,068.03
0.00389%
541420
Industrial Design Services
$22,000.00
0.00371%
484121
General Freight Trucking, Long -Distance,
$21,393.49
o
0.00360%
Truckload
488999
All Other Support Activities for Transportation
$20,266.70
0.00341%
337215
Showcase, Partition, Shelving, and Locker
$15,915.00
0.00268%
Manufacturing
221320
Sewage Treatment Facilities
$15,000.00
0.00253%
517311
Wired Telecommunications Carriers
$12,570.30
0.00212%
Research and Development in the Physical,
541715
Engineering, and Life Sciences (except
$12,000.00
0.00202%
Nanotechnology and Biotechnology)
484230
Specialized Freight (except Used Goods)
$10,543.08
0.00178%
Trucking, Long -Distance
561790
Other Services to Buildings and Dwellings
$9,350.00
0.00158%
541350
Building Inspection Services
$9,185.00
0.00155%
316998
All Other Leather Good and Allied Product
$g 870.00
0.00149%
Manufacturing
72 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
NAICS Code Description
Total Contract
Pct Total
Dollars
Contract Dollars
331221
Rolled Steel Shape Manufacturing
$8,307.57
0.00140%
423820
Farm and Garden Machinery and Equipment
$7,956.73
o
0.00134/
Merchant Wholesalers
541211
Offices of Certified Public Accountants
$7,812.50
0.00132%
541611
Administrative Management and General
$7,500.00
0.00126%
Management Consulting Services
327110
Pottery, Ceramics, and Plumbing Fixture
$6,982.00
0.00118%
Manufacturing
519110
News Syndicates
$6,499.98
0.00110%
541613
Marketing Consulting Services
$6,100.00
0.00103%
531390
Other Activities Related to Real Estate
$5,390.54
0.00091%
323111
Commercial Printing (except Screen and
$4,892.87
0.00082%
Books)
424950
Paint, Varnish, and Supplies Merchant
$4,513.25
0.00076%
Wholesalers
561320
Temporary Help Services
$4,424.40
0.00075%
488410
Motor Vehicle Towing
$4,350.00
0.00073%
561910
Packaging and Labeling Services
$3,507.03
0.00059%
332996
Fabricated Pipe and Pipe Fitting
$2,905.00
0.00049%
Manufacturing
532490
Other Commercial and Industrial Machinery
$2,545.58
0.00043%
and Equipment Rental and Leasing
424120
Stationery and Office Supplies Merchant
$2,240.00
0.00038%
Wholesalers
561499
All Other Business Support Services
$1,335.00
0.00022%
541340
Drafting Services
$1,127.50
0.00019%
Commercial and Industrial Machinery and
811310
Equipment (except Automotive and
$1,083.71
0.00018%
Electronic) Repair and Maintenance
531320
Offices of Real Estate Appraisers
$1,066.00
0.00018%
423710
Hardware Merchant Wholesalers
$114.31
0.00002%
Total
$593,484,030.87
100.0%
Source: CHA analysis of the City data.
0 2020 CH Advisors, Inc., All Rights Reserved. 73
Table 4-4: Distribution of Contract Dollars by Race and Gender
(total dollars)
NAICS
212312
Black
$0
•
$0
$0
Native
American
$0
White
Women
$0
$0
•Total
$248,743
$248,743
212321
$0
$54,333
$0
$0
$0
$54,333
$0
$54,333
213112
$0
$46,224
$0
$0
$0
$46,224
$0
$46,224
221320
$0
$0
$0
$0
$15,000
$15,000
$0
$15,000
221330
$0
$352,864
$0
$0
$0
$352,864
$0
$352,864
236210
$0
$17,820
$105,548
$0
$0
$123,368
$0
$123,368
236220
$326,446
$989,139
$0
$0
$7,071,932
$8,387,517
$41,867,870
$50,255,386
237110
$0
$6,230,264
$1,248,532
$0
$3,282,097
$10,760,892
$161,220,636
$171,981,529
237120
$0
$446,144
$0
$0
$1,260
$447,404
$149,369
$596,773
237310
$4,292,711
$8,120,126
$9,696,045
$0
$1,663,615
$23,772,496
$168,041,429
$191,813,925
237990
$75,600
$48,600
$461,172
$0
$0
$585,372
$8,389,909
$8,975,282
238110
$1,318,820
$2,265,191
$493,992
$0
$313,990
$4,391,992
$366,914
$4,758,906
238120
$45,491
$439,380
$0
$261,923
$425,644
$1,172,438
$3,261,833
$4,434,271
238140
$1,139,768
$217,688
$0
$0
$0
$1,357,456
$680,382
$2,037,838
238150
$0
$0
$0
$0
$293,938
$293,938
$0
$293,938
238160
$0
$950,003
$0
$0
$0
$950,003
$719,254
$1,669,257
238190
$0
$1,653,966
$0
$0
$5,532
$1,659,498
$29,176
$1,688,673
238210
$0
$1,616,174
$0
$0
$1,442,094
$3,058,268
$14,601,874
$17,660,142
238220
$605,421
$1,381,813
$0
$0
$249,770
$2,237,004
$4,878,116
$7,115,119
238290
$0
$0
$0
$0
$0
$0
$256,879
$256,879
238310
$0
$4,539
$0
$0
$177,411
$181,950
$1,603,688
$1,785,638
X
238320
Black
$20,100
HispanicNAICS
$163,496
$0
Native
American
$0
White
Women
$118,504
$302,100
•Total
$209,276
$511,376
238330
$0
$39,434
$0
$0
$75,028
$114,462
$406,848
$521,310
238340
$0
$990
$0
$0
$0
$990
$211,609
$212,599
238350
$34,155
$234,583
$0
$0
$43,175
$311,913
$292,852
$604,765
238390
$0
$0
$0
$0
$1,332,516
$1,332,516
$34,291
$1,366,807
238910
$439,132
$178,470
$50,085
$0
$4,726,598
$5,394,285
$3,116,790
$8,511,074
238990
$24,581
$1,219,351
$18,905
$0
$117,749
$1,380,587
$2,480,170
$3,860,757
314999
$0
$0
$0
$0
$0
$0
$175,243
$175,243
316998
$0
$0
$0
$0
$8,870
$8,870
$0
$8,870
321114
$0
$0
$0
$0
$38,172
$38,172
$0
$38,172
323111
$0
$4,893
$0
$0
$0
$4,893
$0
$4,893
324110
$0
$0
$0
$0
$0
$0
$29,786
$29,786
324121
$0
$0
$0
$0
$0
$0
$8,249,911
$8,249,911
326122
$0
$0
$0
$0
$0
$0
$163,046
$163,046
327110
$0
$0
$0
$0
$0
$0
$6,982
$6,982
327320
$0
$0
$0
$0
$5,795,626
$5,795,626
$1,382,983
$7,178,609
327332
$0
$145,489
$0
$0
$0
$145,489
$317,565
$463,054
327410
$0
$0
$0
$0
$0
$0
$93,300
$93,300
331110
$0
$0
$0
$0
$62,367
$62,367
$112,913
$175,280
331210
$0
$141,891
$0
$0
$0
$141,891
$3,518
$145,409
331221
$0
$0
$0
$0
$0
$0
$8,308
$8,308
331511
$0
$0
$0
$0
$1,930
$1,930
$321,133
$323,062
332312
$0
$0
$0
$0
$0
$0
$1,493,338
$1,493,338
O
332618
Black
$0
HispanicNAICS
$0
$0
American
$0
Women
$193,400
$193,400
$0
$193,400
332996
$0
$0
$0
$0
$0
$0
$2,905
$2,905
332999
$0
$633
$0
$0
$213,645
$214,278
$249,557
$463,835
333120
$0
$0
$0
$0
$0
$0
$141,032
$141,032
337215
$0
$15,915
$0
$0
$0
$15,915
$0
$15,915
339950
$0
$0
$0
$0
$0
$0
$262,991
$262,991
423320
$0
$0
$7,646
$0
$4,056,361
$4,064,007
$1,730,529
$5,794,536
423390
$0
$12,703
$0
$0
$0
$12,703
$444,811
$457,514
423440
$0
$0
$0
$0
$64,498
$64,498
$0
$64,498
423510
$0
$404,993
$0
$0
$30,210
$435,203
$9,973,823
$10,409,025
423610
$0
$1,303,533
$0
$0
$1,659,358
$2,962,891
$1,158,772
$4,121,664
423710
$0
$0
$0
$0
$0
$0
$114
$114
423720
$0
$198,119
$0
$0
$0
$198,119
$371,873
$569,992
423740
$0
$0
$0
$0
$0
$0
$57,298
$57,298
423820
$0
$0
$0
$0
$0
$0
$7,957
$7,957
423840
$265,750
$3,974,838
$0
$0
$464,568
$4,705,155
$2,156,408
$6,861,563
424120
$0
$0
$0
$0
$0
$0
$2,240
$2,240
424590
$0
$120,693
$0
$0
$0
$120,693
$0
$120,693
424690
$0
$0
$0
$0
$27,584
$27,584
$0
$27,584
424710
$0
$0
$0
$0
$149,850
$149,850
$73,967
$223,817
424720
$0
$0
$0
$0
$1,285,479
$1,285,479
$264,670
$1,550,149
424950
$0
$0
$0
$0
$0
$0
$4,513
$4,513
444120
$0
$0
$0
$87,256
$0
$87,256
$0
$87,256
Lon
c
CL
N
O
N
0
X
444190
Black
$0
HispanicNAICS
$499,683
$0
Native
American
$0
White
Women
$0
$499,683
•Total
$428,200
$927,883
453998
$0
$0
$75,021
$0
$0
$75,021
$0
$75,021
454310
$0
$0
$0
$0
$126,697
$126,697
$0
$126,697
484110
$440,951
$2,533,149
$0
$0
$0
$2,974,099
$27,538
$3,001,638
484121
$0
$0
$0
$0
$0
$0
$21,393
$21,393
484220
$2,899,018
$6,850,990
$0
$0
$353,799
$10,103,807
$335,277
$10,439,083
484230
$0
$10,543
$0
$0
$0
$10,543
$0
$10,543
488410
$0
$0
$0
$0
$0
$0
$4,350
$4,350
488999
$0
$0
$0
$0
$20,267
$20,267
$0
$20,267
517311
$0
$622
$0
$0
$11,948
$12,570
$0
$12,570
519110
$0
$0
$0
$0
$6,500
$6,500
$0
$6,500
524126
$0
$0
$0
$0
$0
$0
$306,515
$306,515
531320
$1,066
$0
$0
$0
$0
$1,066
$0
$1,066
531390
$0
$0
$0
$0
$5,391
$5,391
$0
$5,391
532412
$0
$0
$0
$0
$0
$0
$726,447
$726,447
532490
$0
$0
$0
$0
$0
$0
$2,546
$2,546
541191
$0
$75,871
$0
$0
$140,581
$216,451
$0
$216,451
541211
$0
$0
$0
$0
$7,812
$7,812
$0
$7,812
541310
$0
$0
$0
$0
$84,383
$84,383
$71,908
$156,292
541320
$7,500
$0
$0
$0
$0
$7,500
$33,500
$41,000
541330
$192,390
$8,605,379
$1,635,460
$1,472,900
$2,452,700
$14,358,828
$16,363,619
$30,722,447
541340
$0
$0
$0
$0
$1,128
$1,128
$0
$1,128
541350
$0
$0
$0
$0
$9,185
$9,185
$0
$9,185
O
541370
Black
$0
HispanicNAICS
$732,813
$0
American
$309,574
Women
$457,465
$1,499,852
$128,106
$1,627,958
541380
$309,106
$69,799
$0
$0
$293,724
$672,629
$231,223
$903,852
541420
$0
$0
$0
$0
$0
$0
$22,000
$22,000
541611
$0
$0
$0
$0
$7,500
$7,500
$0
$7,500
541613
$6,100
$0
$0
$0
$0
$6,100
$0
$6,100
541620
$38,040
$0
$0
$0
$0
$38,040
$0
$38,040
541715
$0
$0
$0
$0
$12,000
$12,000
$0
$12,000
541720
$0
$0
$0
$0
$40,962
$40,962
$0
$40,962
541820
$76,487
$0
$0
$0
$0
$76,487
$0
$76,487
541990
$10,165
$35,800
$0
$0
$81,007
$126,972
$0
$126,972
561311
$0
$0
$0
$0
$80,000
$80,000
$0
$80,000
561320
$0
$4,424
$0
$0
$0
$4,424
$0
$4,424
561440
$0
$0
$0
$0
$0
$0
$553,474
$553,474
561499
$0
$0
$0
$0
$1,335
$1,335
$0
$1,335
561621
$0
$178,755
$0
$0
$0
$178,755
$0
$178,755
561720
$1,245,534
$0
$811,687
$0
$212,469
$2,269,690
$0
$2,269,690
561730
$0
$6,067,853
$0
$0
$130,876
$6,198,729
$641,672
$6,840,401
561790
$9,350
$0
$0
$0
$0
$9,350
$0
$9,350
561910
$0
$0
$0
$3,507
$0
$3,507
$0
$3,507
561990
$5,732
$418,610
$0
$0
$561,037
$985,378
$247,679
$1,233,057
562111
$237,726
$0
$0
$0
$7,793
$245,519
$0
$245,519
562910
$0
$0
$0
$0
$585,739
$585,739
$0
$585,739
,w
c
CL
N
O
N
O
Source: CHA analysis of the City data.
Table 4-5: Distribution of Contract Dollars by Race and Gender
(share of total dollars)
212312
Black
0.0%
HispanicNAICS
0.0%
0.0%
American
0.0%
Women
0.0%
0.0%
M/WBE
100.0%
100.0%
212321
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
213112
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
221320
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
221330
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
236210
0.0%
14.4%
85.6%
0.0%
0.0%
100.0%
0.0%
100.0%
236220
0.7%
2.0%
0.0%
0.0%
14.1%
16.7%
83.3%
100.0%
237110
0.0%
3.6%
0.7%
0.0%
1.9%
6.3%
93.7%
100.0%
237120
0.0%
74.8%
0.0%
0.0%
0.2%
75.0%
25.0%
100.0%
237310
2.2%
4.2%
5.1%
0.0%
0.9%
12.4%
87.6%
100.0%
237990
0.8%
0.5%
5.1%
0.0%
0.0%
6.5%
93.5%
100.0%
238110
27.7%
47.6%
10.4%
0.0%
6.6%
92.3%
7.7%
100.0%
238120
1.0%
9.9%
0.0%
5.9%
9.6%
26.4%
73.6%
100.0%
238140
55.9%
10.7%
0.0%
0.0%
0.0%
66.6%
33.4%
100.0%
238150
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
0
h
TI
0
0
rt
S
City of Fort Worth Disparity Study 2020
NAICS
238160
Black
0.0%
Hispanic
56.9%
Asian
0.0%
Native
American
0.0%
White
Women
0.0%
M/WBE
56.9%
Non-
M/WBE
43.1%
Total
100.0%
238190
0.0%
97.9%
0.0%
0.0%
0.3%
98.3%
1.7%
100.0%
238210
0.0%
9.2%
0.0%
0.0%
8.2%
17.3%
82.7%
100.0%
238220
8.5%
19.4%
0.0%
0.0%
3.5%
31.4%
68.6%
100.0%
238290
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
238310
0.0%
0.3%
0.0%
0.0%
9.9%
10.2%
89.8%
100.0%
238320
3.9%
32.0%
0.0%
0.0%
23.2%
59.1%
40.9%
100.0%
238330
0.0%
7.6%
0.0%
0.0%
14.4%
22.0%
78.0%
100.0%
238340
0.0%
0.5%
0.0%
0.0%
0.0%
0.5%
99.5%
100.0%
238350
5.7%
38.8%
0.0%
0.0%
7.1%
51.6%
48.4%
100.0%
238390
0.0%
0.0%
0.0%
0.0%
97.5%
97.5%
2.5%
100.0%
238910
5.2%
2.1%
0.6%
0.0%
55.5%
63.4%
36.6%
100.0%
238990
0.6%
31.6%
0.5%
0.0%
3.1%
35.8%
64.2%
100.0%
314999
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
316998
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
321114
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
323111
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
324110
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
324121
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
326122
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
327110
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
327320
0.0%
0.0%
0.0%
0.0%
80.7%
80.7%
19.3%
100.0%
327332
0.0%
31.4%
0.0%
0.0%
0.0%
31.4%
68.6%
100.0%
327410
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
331110
0.0%
0.0%
0.0%
0.0%
35.6%
35.6%
64.4%
100.0%
331210
0.0%
97.6%
0.0%
0.0%
0.0%
97.6%
2.4%
100.0%
331221
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
331511
0.0%
0.0%
0.0%
0.0%
0.6%
0.6%
99.4%
100.0%
332312
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
332618
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
80 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
332996
Black
0.0%
Hispanic
0.0%
Asian
0.0%
Native
American
0.0%
White
Women
0.0%
M/WBE
0.0%
Non-
M/WBE
100.0%
Total
100.0%
332999
0.0%
0.1%
0.0%
0.0%
46.1%
46.2%
53.8%
100.0%
333120
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
337215
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
339950
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
423320
0.0%
0.0%
0.1%
0.0%
70.0%
70.1%
29.9%
100.0%
423390
0.0%
2.8%
0.0%
0.0%
0.0%
2.8%
97.2%
100.0%
423440
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
423510
0.0%
3.9%
0.0%
0.0%
0.3%
4.2%
95.8%
100.0%
423610
0.0%
31.6%
0.0%
0.0%
40.3%
71.9%
28.1%
100.0%
423710
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
423720
0.0%
34.8%
0.0%
0.0%
0.0%
34.8%
65.2%
100.0%
423740
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
423820
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
423840
3.9%
57.9%
0.0%
0.0%
6.8%
68.6%
31.4%
100.0%
424120
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
424590
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
424690
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
424710
0.0%
0.0%
0.0%
0.0%
67.0%
67.0%
33.1%
100.0%
424720
0.0%
0.0%
0.0%
0.0%
82.9%
82.9%
17.1%
100.0%
424950
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
444120
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
0.0%
100.0%
444190
0.0%
53.9%
0.0%
0.0%
0.0%
53.9%
46.2%
100.0%
453998
0.0%
0.0%
100.0%
0.0%
0.0%
100.0%
0.0%
100.0%
454310
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
484110
14.7%
84.4%
0.0%
0.0%
0.0%
99.1%
0.9%
100.0%
484121
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
484220
27.8%
65.6%
0.0%
0.0%
3.4%
96.8%
3.2%
100.0%
484230
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
488410
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
O 2020 CH Advisors, Inc., All Rights Reserved. 81
City of Fort Worth Disparity Study 2020
NAICS
488999
Black
0.0%
Hispanic
0.0%
Asian
0.0%
Native
American
0.0%
White
Women
100.0%
M/WBE
100.0%
Non-
M/WBE
0.0%
Total
100.0%
517311
0.0%
5.0%
0.0%
0.0%
95.1%
100.0%
0.0%
100.0%
519110
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
524126
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
531320
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
531390
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
532412
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
532490
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
541191
0.0%
35.1%
0.0%
0.0%
65.0%
100.0%
0.0%
100.0%
541211
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541310
0.0%
0.0%
0.0%
0.0%
54.0%
54.0%
46.0%
100.0%
541320
18.3%
0.0%
0.0%
0.0%
0.0%
18.3%
81.7%
100.0%
541330
0.6%
28.0%
5.3%
4.8%
8.0%
46.7%
53.3%
100.0%
541340
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541350
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541370
0.0%
45.0%
0.0%
19.0%
28.1%
92.1%
7.9%
100.0%
541380
34.2%
7.7%
0.0%
0.0%
32.5%
74.4%
25.6%
100.0%
541420
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
541611
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541613
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
541620
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
541715
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541720
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
541820
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
541990
8.0%
28.2%
0.0%
0.0%
63.8%
100.0%
0.0%
100.0%
561311
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
561320
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
561440
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
561499
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
561621
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
82 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
561720
Black
54.9%
Hispanic
0.0%
Asian
35.8%
Native
American
0.0%
White
Women
9.4%
M/WBE
100.0%
Non-
M/WBE
0.0%
Total
100.0%
561730
0.0%
88.7%
0.0%
0.0%
1.9%
90.6%
9.4%
100.0%
561790
100.0%
0.0%
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
561910
0.0%
0.0%
0.0%
100.0%
0.0%
100.0%
0.0%
100.0%
561990
0.5%
34.0%
0.0%
0.0%
45.5%
79.9%
20.1%
100.0%
562111
96.8%
0.0%
0.0%
0.0%
3.2%
100.0%
0.0%
100.0%
562910
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
0.0%
100.0%
562991
0.0%
44.0%
0.0%
0.0%
13.6%
57.6%
42.4%
100.0%
811310
Total
0.0%
2.4%
0.0%
0.0
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
00.0
Source: CHA analysis of the City data.
4. The Availability of M/WBEs in the City of Fort Worth's
Constrained Product Market
Estimates of the availability of M/WBEs in the City's market area are a critical
component of the analysis of possible barriers to equal opportunities to partic-
ipate in the agency's contracting activities. These availability estimates are
compared to the utilization percentage of dollars received by M/WBEs to
examine whether minority- and women -owned firms are at parity. Availability
estimates are also crucial for the City to set narrowly tailored annual and con-
tract goals on contracts covered by its M/WBE program.
We generally applied the "custom census" approach with refinements to esti-
mating availability. The courts and the National Model Disparity Study Guide-
lines119 have recognized this methodology as superior to the other methods
for at least four reasons:
First, it provides an internally consistent and rigorous "apples to apples"
comparison between firms in the availability numerator and those in the
denominator. Other approaches often have different definitions for the
firms in the numerator (e.g., certified M/WBEs or firms that respond to a
survey) and the denominator (e.g., registered vendors or the Census
Bureaus' County Business Patterns data).
119. National Dispority Study Guidelines, pp.57-58.
O 2020 CH Advisors, Inc., All Rights Reserved. 83
City of Fort Worth Disparity Study 2020
Second, by examining a comprehensive group of firms, it "casts a broader
net" beyond those known to the agency. As recognized by the courts, this
comports with the remedial nature of contracting affirmative action
programs by seeking to bring in businesses that have historically been
excluded. Our methodology is less likely to be tainted by the effects of
past and present discrimination than other methods, such as bidders'
lists, because it seeks out firms in the City's market areas that have not
been able to access the agency's opportunities.
Third, this approach is less impacted by variables affected by
discrimination. Factors such as firm age, size, qualifications, and
experience are all elements of business success where discrimination
would be manifested. Most courts have held that the results of
discrimination — which impact factors affecting capacity — should not be
the benchmark for a program designed to ameliorate the effects of
discrimination. They have acknowledged that minority and women firms
may be smaller, newer, and otherwise less competitive than non-M/WBEs
because of the very discrimination sought to be remedied by race -
conscious contracting programs. Racial and gender differences in these
"capacity" factors are the outcomes of discrimination and it is therefore
inappropriate as a matter of economics and statistics to use them as
"control" variables in a disparity study.120
Fourth, it has been upheld by every court that has reviewed it, including
most recently in the successful defense of the Illinois State Toll Highway's
DBE program, for which we served as testifying experts.121
Using this framework, CHA utilized three databases to estimate availability:
• The Final Contract Data File;
• The Master M/WBE Directory compiled by CHA; and
• The Dun & Bradstreet/Hoovers Database downloaded from the
company's website.
The Master D/M/WBE Directory combined the results of an exhaustive search
for directories and other lists containing information about minority- and
women -owned businesses. The resulting list of minority- and women -owned
businesses is comprehensive. After compiling the Master D/M/WBE Directory,
we limited the firms we used in our analysis to those operating within the
City's constrained product market.
120. For a detailed discussion of the role of capacity in disparity studies, seethe National Disparity Study Guidelines, Appendix
B, "Understanding Capacity."
121. Midwest Fence, Corp. v. U.S. Department of Transportation et al., 840 F.3d 932 (2016); see also Northern Contracting,
Inc. v. Illinois Department of Transportation, 473 F.3d 715 (7th Cir. 2007), cert. denied, 137 S.Ct. 2292 (2017).
84 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disoarity Study 2020
We next developed a custom database from Hoovers, a Dun & Bradstreet com-
pany. Hoovers maintains a comprehensive, extensive and regularly updated
listing of all firms conducting business. The database includes a vast amount of
information on each firm, including location and detailed industry codes, and is
the broadest publicly available data source for firm information. We purchased
the information from Hoovers for the firms in the NAICS codes located in the
City's market area in order to form our custom Dun & Bradstreet/Hoovers
Database. In the initial download, the data from Hoovers simply identifies a
firm as being minority-owned.122 However, the company does keep detailed
information on ethnicity (i.e., is the minority firm owner Black, Hispanic, Asian,
or Native American). We obtained this additional information from Hoovers by
special request.123
We merged these three databases to form an accurate estimate of firm avail-
ability to the agency. Tables 4-6 through 4-19 present data on:
• The unweighted availability by race and gender, and by NAICS codes for
contracts in the City's constrained product markets;
• The weights used to adjust the unweighted numbers 124;
• The final estimates of the weighted averages of the individual 6-digit level
availability estimates in the City's market areas; and
• The disparity ratios by demographic group.
The weighted availability estimates can be used by the City to set its M/WBE
goals.
Table 4-6: Unweighted Availability for the City of Fort Worth's Contracts
NAICS
Black
Hispanic
Asian
Native
American
White
Women
M/WBE
Non-
M/WBE
Total
212312
0.0%
0.0%
0.0%
0.0%
5.0%
5.0%
95.0%
100.0%
212321
3.6%
1.8%
0.0%
0.0%
1.8%
7.3%
92.7%
100.0%
213112
0.1%
0.4%
0.0%
0.0%
1.2%
1.7%
98.3%
100.0%
221320
0.0%
0.0%
0.0%
0.0%
10.0%
10.0%
90.0%
100.0%
221330
10.0%
20.0%
0.0%
0.0%
0.0%
30.0%
70.0%
100.0%
236210
19.0%
19.0%
5.1%
2.9%
14.6%
60.6%
39.4%
100.0%
122. The variable is labeled: "Is Minority Owned" and values for the variable can be either "yes" or "no".
123. Hoovers was able to provide the detailed information for 75 percent of the firms. We used the available information to
estimate the detailed information for the firms where the data was not provided.
124. These weights are equivalent to the share of contract dollars presented in the previous section.
O 2020 CH Advisors, Inc., All Rights Reserved. 85
City of Fort Worth Disparity Study 2020
NAICS
236220
Black
11.8%
Hispanic
9.0°%
Asian
31°%
Native
American
21°%
White
Women
9.2°%
M/WBE
35.4%
Non-
M/WBE
64.6%
Total
100.0%
237110
0.0%
5.2%
0.7%
0.0%
5.2%
11.8%
88.2%
100.0%
237120
3.0%
3.0%
0.0%
0.0%
1.0%
7.1%
92.9%
100.0%
237310
13.7%
15.2%
2.3%
1.0%
8.0%
40.4%
59.6%
100.0%
237990
3.0%
2.0%
2.0%
0.0%
3.0%
10.0%
90.0%
100.0%
238110
0.7%
3.3%
0.5%
0.4%
3.9%
9.1%
90.9%
100.0%
238120
9.9%
23.7%
0.8%
3.8%
13.0%
51.9%
48.1%
100.0%
238140
1.8%
3.4%
0.0%
0.0%
3.1%
8.3%
91.7%
100.0%
238150
0.0%
1.8%
3.5%
0.0%
16.7%
21.9%
78.1%
100.0%
238160
0.9%
1.4%
0.3%
0.3%
2.5%
5.7%
94.3%
100.0%
238190
1.7%
6.7%
0.0%
0.0%
5.0%
13.3%
86.7%
100.0%
238210
3.1%
4.4%
1.0%
0.4%
6.4%
15.7%
84.3%
100.0%
238220
2.6%
2.4%
0.3%
0.1%
3.6%
9.1%
90.9%
100.0%
238290
8.1%
12.8%
4.7%
2.3%
14.0%
41.9%
58.1%
100.0%
238310
4.1%
8.3%
0.2%
0.7%
4.8%
18.3%
81.7%
100.0%
238320
0.5%
1.9%
0.3%
0.1%
2.8%
5.8%
94.2%
100.0%
238330
1.4%
1.9%
0.0%
0.0%
6.5%
10.2%
89.8%
100.0%
238340
0.0%
1.1%
0.6%
0.0%
4.5%
6.4%
93.6%
100.0%
238350
0.4%
0.8%
0.4%
0.0%
4.2%
5.8%
94.2%
100.0%
238390
0.5%
0.9%
0.0%
0.0%
2.7%
4.1%
95.9%
100.0%
238910
9.3%
12.4%
1.8%
1.8%
13.1%
38.3%
61.7%
100.0%
238990
2.5%
2.9%
0.4%
0.2%
5.3%
11.4%
88.6%
100.0%
314999
0.4%
0.8%
0.0%
0.0%
18.1%
19.3%
80.7%
100.0%
316998
1.5%
0.0%
0.0%
0.0%
4.6%
6.2%
93.8%
100.0%
321114
0.0%
0.0%
0.0%
0.0%
33.3%
33.3%
66.7%
100.0%
323111
1.3%
1.3%
1.1%
0.3%
8.6%
13.4%
86.6%
100.0%
324110
2.7%
0.0%
0.0%
0.0%
1.4%
4.1%
95.9%
100.0%
324121
0.0%
18.2%
0.0%
0.0%
4.5%
22.7%
77.3%
100.0%
326122
0.0%
0.0%
0.0%
0.0%
18.2%
18.2%
81.8%
100.0%
327110
0.0%
0.0%
0.0%
0.0%
5.0%
5.0%
95.0%
100.0%
86 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
327320
Black
0.9%
Hispanic
0.9%
Asian
0.0%
Native
American
0.0%
White
Women
11.8%
M/WBE
14.5%
Non-
M/WBE
85.5%
Total
100.0%
327332
0.0%
5.9%
0.0%
0.0%
0.0%
5.9%
94.1%
100.0%
327410
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
100.0%
100.0%
331110
0.0%
0.0%
0.0%
0.0%
5.4%
5.4%
94.6%
100.0%
331210
0.0%
11.1%
0.0%
0.0%
0.0%
11.1%
88.9%
100.0%
331221
0.0%
0.0%
0.0%
0.0°%
71°%
71°%
92.9%
100.0%
331511
0.0%
0.0%
0.0%
0.0%
22.2%
22.2%
77.8%
100.0%
332312
0.8%
5.5%
0.8%
0.8%
11.7%
19.5%
80.5%
100.0%
332618
0.0%
0.0%
0.0%
0.0%
9.4%
9.4%
90.6%
100.0%
332996
0.0%
0.0%
0.0%
0.0%
5.3%
5.3%
94.7%
100.0%
332999
1.4%
1.4%
1.4%
0.0%
4.2%
8.3%
91.7%
100.0%
333120
0.0%
0.0%
0.0%
0.0%
5.3%
5.3%
94.7%
100.0%
337215
0.0%
8.7%
4.3%
0.0%
0.0%
13.0%
87.0%
100.0%
339950
1.2%
0.6%
1.0%
0.2%
7.0%
10.7%
89.3%
100.0%
423320
0.3%
1.5%
1.8%
0.0%
4.3%
8.3%
91.7%
100.0%
423390
1.4%
1.4%
0.0%
0.0%
5.5%
8.2%
91.8%
100.0%
423440
0.6%
0.5%
0.3%
0.2%
2.6%
4.2%
95.8%
100.0%
423510
0.0%
2.2%
0.0%
0.3%
2.8%
5.6%
94.4%
100.0%
423610
0.8%
2.2%
1.0%
0.2%
7.3%
12.2%
87.8%
100.0%
423710
0.0%
0.5%
1.1%
0.0%
7.6%
9.8%
90.2%
100.0%
423720
0.5%
1.0%
0.0%
0.0%
8.8%
10.3%
89.7%
100.0%
423740
0.0°%
1 9°%
3.8%
1 9°%
7.7°%
15.4%
84.6%
100.0%
423820
0.0%
0.0%
0.0%
0.0%
3.8%
3.8%
96.3%
100.0%
423840
1.1%
1.3%
1.1%
1.1%
7.4%
12.2%
87.8%
100.0%
424120
1.3%
1.3%
3.3%
0.0%
16.3%
22.9%
77.1%
100.0%
424590
0.0%
1.2%
0.0%
0.0%
1.2%
2.4%
97.6%
100.0%
424690
2.4%
1.4%
0.0%
1.4%
6.7%
12.0%
88.0%
100.0%
424710
7.1%
0.0%
0.0%
0.0%
7.1%
14.3%
85.7%
100.0%
424720
0.5%
0.0%
0.0%
0.0%
2.9%
3.4%
96.6%
100.0%
424950
0.0%
0.7%
0.0%
0.7%
2.9%
4.4%
95.6%
100.0%
O 2020 CH Advisors, Inc., All Rights Reserved. 87
City of Fort Worth Disparity Study 2020
NAICS
444120
Black
0.0%
Hispanic
0.6%
Asian
0.0%
Native
American
0.3%
White
Women
2.5%
M/WBE
3.5%
Non-
M/WBE
96.5%
Total
100.0%
444190
0.0%
0.7%
0.2%
0.0%
4.6%
5.6%
94.4%
100.0%
453998
0.3%
0.1%
0.1%
0.1%
3.6%
4.4%
95.6%
100.0%
454310
0.0%
0.0%
0.0%
0.0%
2.8%
2.8%
97.2%
100.0%
484110
1.8%
1.0%
0.0%
0.0%
2.1%
5.2%
94.8%
100.0%
484121
4.5%
0.9%
0.2%
0.0%
3.3%
9.2%
90.8%
100.0%
484220
20.4%
37.0%
0.3%
1.2%
9.6%
69.1%
30.9%
100.0%
484230
3.2%
1.1%
0.0%
0.0%
5.3%
12.6%
87.4%
100.0%
488410
0.3%
0.0%
0.0%
0.0%
3.9%
4.5%
95.5%
100.0%
488999
1.0%
0.1%
0.1%
0.0%
1.6%
2.9%
97.1%
100.0%
517311
0.7%
0.7%
1.7%
0.3%
3.8%
7.7%
92.3 %
100.0%
519110
0.0%
0.0%
0.0%
0.0%
12.5%
12.5%
87.5%
100.0%
524126
0.2%
0.4%
0.0%
0.0%
1.4%
2.2%
97.8%
100.0%
531320
0.9%
0.4%
0.0%
0.4%
6.1%
8.7%
91.3%
100.0%
531390
5.8%
0.0%
2.5%
0.0%
6.7%
15.8%
84.2%
100.0%
532412
0.0%
1.0%
1.0%
0.0%
2.0%
5.1%
94.9%
100.0%
532490
0.3%
0.3%
0.0%
0.0%
1.5%
2.2%
97.8%
100.0%
541191
0.0%
1.7%
0.0%
0.0%
5.1%
6.8%
93.2%
100.0%
541211
1.2%
0.5%
0.2%
0.0%
5.0%
7.1%
92.9%
100.0%
541310
2.4%
2.4%
1.1%
0.6%
5.6%
12.7%
87.3%
100.0%
541320
0.4%
0.6%
0.0%
0.1%
3.9%
5.0%
95.0%
100.0%
541330
3.9%
5.3%
6.4%
1.0%
7.8%
25.0%
75.0%
100.0%
541340
0.0%
0.0%
0.0%
0.0%
3.6%
3.6%
96.4%
100.0%
541350
4.0%
1.0%
1.0%
0.0%
5.9%
11.9%
88.1%
100.0%
541370
1.6%
4.8%
0.5%
1.1%
5.3%
13.8%
86.2%
100.0%
541380
2.0%
2.6%
2.8%
0.0%
10.2%
17.8%
82.2%
100.0%
541420
0.0%
0.0%
0.0%
0.0%
17.8%
17.8%
82.2%
100.0%
541611
2.3%
0.6%
0.5%
0.1%
4.8%
8.6%
91.4%
100.0%
541613
1.4%
0.5%
0.4%
0.1%
4.6%
7.3%
92.7%
100.0%
541620
2.5%
1.2%
0.9%
0.0%
10.6%
15.8%
84.2%
100.0%
88 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
NAICS
541715
Black
1.5%
Hispanic
0.6%
Asian
2.6%
Native
American
0.0%
White
Women
3.8%
M/WBE
8.5%
Non-
M/WBE
91.5%
Total
100.0%
541720
1.7%
0.3%
0.0%
0.0%
3.1%
5.1%
94.9%
100.0%
541820
2.9%
0.0%
0.0%
0.0%
12.8%
16.2%
83.8%
100.0%
541990
0.6%
0.3%
0.1%
0.0%
4.2%
5.4%
94.6%
100.0%
561311
2.8%
1.5%
1.4%
0.3%
8.1%
15.1%
84.9%
100.0%
561320
6.8%
4.3%
6.0%
0.4%
13.5%
31.5%
68.5%
100.0%
561440
3.2%
0.0%
0.8%
0.0%
4.0%
7.9%
92.1%
100.0%
561499
0.5%
0.2%
0.2%
0.0%
1.7%
2.7%
97.3%
100.0%
561621
3.2%
1.0%
0.7%
0.2%
5.2%
10.6%
89.4%
100.0%
561720
3.3%
1.4%
0.9%
0.3%
7.1%
13.3%
86.7%
100.0%
561730
0.9%
0.8%
0.1%
0.0%
3.5%
5.5%
94.5%
100.0%
561790
1.0%
0.6%
0.1%
0.0%
3.4%
5.1%
94.9%
100.0%
561910
0.0%
2.7%
0.0%
1.3%
9.3%
13.3%
86.7%
100.0%
561990
1.2%
0.3%
0.1%
0.1%
1.8%
3.6%
96.4%
100.0%
562111
6.3%
0.0%
0.0%
0.0%
18.8%
25.0%
75.0%
100.0%
562910
18.6%
14.4%
4.2%
3.4%
21.2%
62.7%
37.3%
100.0%
562991
0.0%
1.1%
0.0%
0.0%
7.5%
8.6%
91.4%
100.0%
811310
0.3%
1.2%
0.6%
0.1%
3.0%
5.3%
94.7%
100.0%
00
Source: CHA analysis of the City data; Hoovers; CHA Master Directory.
Table 4-7: Share of the City Spending on the City of Fort Worth's Contracts
by NAICS Code
212312
NAICS Code Description
Crushed and Broken Limestone Mining and Quarrying
WEIGHT (Pct Share of
SectorNAICS
Total D.
0.0%
212321
Construction Sand and Gravel Mining
0.0%
213112
Support Activities for Oil and Gas Operations
0.0%
221320
Sewage Treatment Facilities
0.0%
221330
Steam and Air -Conditioning Supply
0.1%
236210
Industrial Building Construction
0.0%
O 2020 CH Advisors, Inc., All Rights Reserved. 89
City of Fort Worth Disparity Study 2020
236220
..
Commercial and Institutional Building Construction
WEIGHT of
SectorTotal D.
8.5%
237110
Water and Sewer Line and Related Structures
Construction
29.0%
237120
Oil and Gas Pipeline and Related Structures Construction
0.1%
237310
Highway, Street, and Bridge Construction
32.3%
237990
Other Heavy and Civil Engineering Construction
1.5%
238110
Poured Concrete Foundation and Structure Contractors
0.8%
238120
Structural Steel and Precast Concrete Contractors
0.7%
238140
Masonry Contractors
0.3%
238150
Glass and Glazing Contractors
0.0%
238160
Roofing Contractors
0.3%
238190
Other Foundation, Structure, and Building Exterior
Contractors
0.3%
238210
Electrical Contractors and Other Wiring Installation
Contractors
3 0°/
238220
Plumbing, Heating, and Air -Conditioning Contractors
1.2%
238290
Other Building Equipment Contractors
0.0%
238310
Drywall and Insulation Contractors
0.3%
238320
Painting and Wall Covering Contractors
0.1%
238330
Flooring Contractors
0.1%
238340
Tile and Terrazzo Contractors
0.0%
238350
Finish Carpentry Contractors
0.1%
238390
Other Building Finishing Contractors
0.2%
238910
Site Preparation Contractors
1.4%
238990
All Other Specialty Trade Contractors
0.7%
314999
All Other Miscellaneous Textile Product Mills
0.0%
316998
All Other Leather Good and Allied Product Manufacturing
0.0%
321114
Wood Preservation
0.0%
323111
Commercial Printing (except Screen and Books)
0.0%
324110
Petroleum Refineries
0.0%
324121
Asphalt Paving Mixture and Block Manufacturing
1.4%
90 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
..
WEIGHT of
SectorTotal D.
326122
Plastics Pipe and Pipe Fitting Manufacturing
0.0%
327110
Pottery, Ceramics, and Plumbing Fixture Manufacturing
0.0%
327320
Ready -Mix Concrete Manufacturing
1.2%
327332
Concrete Pipe Manufacturing
0.1%
327410
Lime Manufacturing
0.0%
331110
Iron and Steel Mills and Ferroalloy Manufacturing
0.0%
Iron and Steel Pipe and Tube Manufacturing from
331210
Purchased Steel
0.0%
331221
Rolled Steel Shape Manufacturing
0.0%
331511
Iron Foundries
0.1%
332312
Fabricated Structural Metal Manufacturing
0.3%
332618
Other Fabricated Wire Product Manufacturing
0.0%
332996
Fabricated Pipe and Pipe Fitting Manufacturing
0.0%
All Other Miscellaneous Fabricated Metal Product
332999
Manufacturing
0.1%
333120
Construction Machinery Manufacturing
0.0%
337215
Showcase, Partition, Shelving, and Locker Manufacturing
0.0%
339950
Sign Manufacturing
0.0%
Brick, Stone, and Related Construction Material Merchant
423320
Wholesalers
1 0%
423390
Other Construction Material Merchant Wholesalers
0.1%
423440
Other Commercial Equipment Merchant Wholesalers
0.0%
Metal Service Centers and Other Metal Merchant
423510
Wholesalers
1 8%
Electrical Apparatus and Equipment, Wiring Supplies, and
423610
Related Equipment Merchant Wholesalers
0 7%
423710
Hardware Merchant Wholesalers
0.0%
Plumbing and Heating Equipment and Supplies
423720
(Hydronics) Merchant Wholesalers
0.1%
Refrigeration Equipment and Supplies Merchant
423740
Wholesalers
0.0%
Farm and Garden Machinery and Equipment Merchant
423820
Wholesalers
0.0%
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City of Fort Worth Disparity Study 2020
423840
..
Industrial Supplies Merchant Wholesalers
WEIGHT of
SectorTotal D.
1.2%
424120
Stationery and Office Supplies Merchant Wholesalers
0.0%
424590
Other Farm Product Raw Material Merchant Wholesalers
0.0%
424690
Other Chemical and Allied Products Merchant
Wholesalers
0.0%
424710
Petroleum Bulk Stations and Terminals
0.0%
424720
Petroleum and Petroleum Products Merchant
Wholesalers (except Bulk Stations and Terminals)
0.3%
424950
Paint, Varnish, and Supplies Merchant Wholesalers
0.0%
444120
Paint and Wallpaper Stores
0.0%
444190
Other Building Material Dealers
0.2%
453998
All Other Miscellaneous Store Retailers (except Tobacco
Stores)
0.0%
454310
Fuel Dealers
0.0%
484110
General Freight Trucking, Local
0.5%
484121
General Freight Trucking, Long -Distance, Truckload
0.0%
484220
Specialized Freight (except Used Goods) Trucking, Local
1.8%
484230
Specialized Freight (except Used Goods) Trucking, Long-
Distance
0.0%
488410
Motor Vehicle Towing
0.0%
488999
All Other Support Activities for Transportation
0.0%
517311
Wired Telecommunications Carriers
0.0%
519110
News Syndicates
0.0%
524126
Direct Property and Casualty Insurance Carriers
0.1%
531320
Offices of Real Estate Appraisers
0.0%
531390
Other Activities Related to Real Estate
0.0%
532412
Construction, Mining, and Forestry Machinery and
Equipment Rental and Leasing
0 1%
532490
Other Commercial and Industrial Machinery and
Equipment Rental and Leasing
0.0%
541191
Title Abstract and Settlement Offices
0.0%
541211
Offices of Certified Public Accountants
0.0%
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City of Fort Worth Disparity Study 2020
541310
..
Architectural Services
WEIGHT of
SectorTotal D.
0.0%
541320
Landscape Architectural Services
0.0%
541330
Engineering Services
5.2%
541340
Drafting Services
0.0%
541350
Building Inspection Services
0.0%
541370
Surveying and Mapping (except Geophysical) Services
0.3%
541380
Testing Laboratories
0.2%
541420
Industrial Design Services
0.0%
541611
Administrative Management and General Management
Consulting Services
0.0%
541613
Marketing Consulting Services
0.0%
541620
Environmental Consulting Services
0.0%
541715
Research and Development in the Physical, Engineering,
and Life Sciences (except Nanotechnology and
Biotechnology)
0.0%
541720
Research and Development in the Social Sciences and
Humanities
0.0%
541820
Public Relations Agencies
0.0%
541990
All Other Professional, Scientific, and Technical Services
0.0%
561311
Employment Placement Agencies
0.0%
561320
Temporary Help Services
0.0%
561440
Collection Agencies
0.1%
561499
All Other Business Support Services
0.0%
561621
Security Systems Services (except Locksmiths)
0.0%
561720
Janitorial Services
0.4%
561730
Landscaping Services
1.2%
561790
Other Services to Buildings and Dwellings
0.0%
561910
Packaging and Labeling Services
0.0%
561990
All Other Support Services
0.2%
562111
Solid Waste Collection
0.0%
562910
Remediation Services
0.1%
O 2020 CH Advisors, Inc., All Rights Reserved. 93
City of Fort Worth Disparity Study 2020
Source: CHA analysis of the City data.
Using the "custom census" approach to estimating availability and the further
assignment of race and gender using the FCDF, the Master M/WBE Directory
and other sources, we determined the aggregated availability of M/WBEs,
weighted by the City's spending in its geographic and industry markets, to be
25.4 percent for City contracts. Table 4-8 presents the weighted availability
data for all product sectors combined for the racial and gender categories.
Table 4-8: Aggregated Weighted Availability for the City of Fort Worth's
Contracts
Source: CHA analysis of the City data; Hoovers; CHA Master Directory.
To meet the strict scrutiny test that requires that all groups must have suffered
discrimination in the City's markets to be eligible for credit towards meeting
M/WBE contract goals, we next calculated disparity ratios comparing the City's
utilization of M/WBEs as prime contractors and subcontractors to the availabil-
ity of these firms in its market areas. Table 4-9 presents these results for City -
funded contracts.
Table 4-9: Disparity Ratios by Demographic Group
Source: CHA analysis of the City data; Hoovers; CHA Master Directory.
* Indicates substantive significance
*Indicates statistical significance at the 0.05 leve1125
125. Appendix C discusses the meaning and role of statistical significance.
94 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
It is the standard CHA practice to explore any M/BWE disparity ratio that
exceeds 100 percent. This is to ensure that an abnormal pattern of M/WBE
concentration does not account for disparity ratios greater than 100 percent.
This exploration entails further examination of any NAICS codes where:
• The NAICS codes share of overall spending is relatively high; or
• The particular M/WBE utilization in that code is relatively high.
Hispanic Disparity Ratio
The Hispanic disparity ratio was 108.0 percent. NAICS code 541330 (Engineer-
ing Services) contained 5.4 percent of all City spending (the fourth highest of
all NAICS codes) and the Hispanic utilization in that code was 28.0 percent —
higher than the overall Hispanic utilization of 10.0 percent. Table 4-10 com-
pares Hispanic and non-M/WBE outcomes in this code.
Table 4-10: Hispanic Versus Non-M/WBE Outcomes in NAICS Code 541330
(Engineering Services)
Hispanic
NAICS code share of all spending
14.6%
3.5%
Number of firms
14
27
Share of group spending in NAICS code by the
largest firm
39.8%
34.0%
Share of group spending in NAICS code by the
second largest firm
25.6%
21.1%
Share of group spending in NAICS code by the
third largest firm
p
13.2/
p
10.6/
Individual firm share of group spending in
Under 9%
The rest
NAICS code by the remaining firms
under 4%
Share of group spending in NAICS code by the
three largest firms
o
78.6/
0
65.7/
Share of group spending in NAICS code by the
remaining firms
22.4%
34.3%
We find a much higher level of concentration among Hispanic firms compared
to non-M/WBE firms. Overall spending is more concentrated in this code: His-
panics received 14.6 percent as compared to non-M/WBEs that received 3.5
percent. Further, the spending was concentrated in a smaller number of firms:
only 14 Hispanic firms received dollars in this code as compared to 27 non-M/
WBEs. Lastly, the largest three Hispanic firms captured a larger share of overall
O 2020 CH Advisors, Inc., All Rights Reserved. 95
City of Fort Worth Disparity Study 2020
spending compared to the largest three non-M/WBE firms: 78.6 percent of the
Hispanic dollars as compared to 65.7 percent of non-M/WBE dollars.
Asian Disparity Ratio
The Asian disparity ratio was 144.1 percent. NAICS code 237310 (Highway,
Street, and Bridge Construction) contained 32.3 percent of all City spending
(the highest of all NAICS codes) and the Asian utilization in that code was 5.:
percent — twice the overall Asian utilization of 2.5 percent. Table 4-10 com-
pares Asian and non-M/WBE outcomes in this code.
Table 4-11: Asian Versus Non-M/WBE Outcomes in NAICS Code 237310
(Highway, Street, and Bridge Construction)
Asian
Non-M/WBE
NAICS code share of all spending
66.4%
36.3%
Number of firms
5
58
Share of group spending in NAICS code by the
largest firm
52.9%
30.7%
Share of group spending in NAICS code by the
second largest firm
24.1%
10.1%
Share of group spending in NAICS code by the
third largest firm
p
16.8/
o
9.4/
Individual firm share of group spending in
The rest
The rest
NAICS code by the remaining firms
under 4%
under 9.0%
Share of group spending in NAICS code by the
three largest firms
o
93.8/
0
50.2/
Share of group spending in NAICS code by the
remaining firms
6.2%
49.8%
We find a much higher level of concentration among Asian firms compared to
non-M/WBE firms. Overall spending is more concentrated in this code: Asians
received 66.4 percent as compared to non-M/WBEs that received 36.3 per-
cent. Further, the spending was concentrated in a smaller number of firms:
only 5 Asian firms received dollars in this code as compared to 58 non-M/
WBEs. Lastly, the largest three Asian firms capture a larger share of overall
spending compared to the largest three non-M/WBE firms: 93.8 percent of the
Asian dollars as compared to 50.2 percent of non-M/WBE dollars.
96 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
White Women Disparity Ratio
The White women disparity ratio was 101.1 percent. NAICS 236220 (Commer-
cial and Institutional Building Construction) contained 8.5 percent of all City
spending (the third highest of all NAICS codes) and the White women utiliza-
tion in that code was 14.1.0 percent — far higher than the overall White
women utilization of 6.9 percent. Table 4-12 compares White women and non-
M/WBE outcomes in this code.
Table 4-12: White Women Versus Non-M/WBE Outcomes in NAICS Code
541330
(Engineering Services)
White
Women
Non-M/WBE
NAICS code share of all spending
17.2%
9.1%
Number of firms
3
9
Share of group spending in NAICS
code by the largest firm
92.5%
65.1%
Share of group spending in NAICS
code by the second largest firm
4.9%
13.5%
Share of group spending in NAICS
code by the third largest firm
2 6°/
11 5%
Individual firm share of group
The rest under
spending n NAICS code b the
s p giY
NA
remaining firms
4%
Share of group spending in NAICS
code by the three largest firms
100.0%
90.1%
Share of group spending in NAICS
code by the remaining firms
o
0.0/
0
9.9/
We find a much higher level of concentration among White women firms com-
pared to non-M/WBE firms. Overall spending is more concentrated in this
code: White women received 17.2 percent as compared to non-M/WBEs that
received 9.1 percent. Further, the spending was concentrated in a small num-
ber of firms: only three White women firms received dollars in this code as
compared to 9 non-M/WBEs. Lastly, the largest three White women firms cap-
ture a larger share of overall spending compared to the largest three non-M/
WBE firms: 100.0 percent of the White women dollars as compared to 90.1
percent of non-M/WBE dollars.
V 2020 CH Advisors, Inc., All Rights Reserved. 97
City of Fort Worth Disparity Study 2020
We conclude from this exploration that the disparity ratios exceeding 100 per-
cent most likely can be explained by the unusual pattern of firm concentration
within some NAICS codes.
98 0 2020 CH Advisors, Inc., All Rights Reserved.
V. ANALYSIS OF ECONOMY -WIDE
DISPARITIES IN THE CITY OF
FORT WORTH"S MARKETS
A. Introduction
The late Nobel Prize Laureate Kenneth Arrow, in his seminal paper on the eco-
nomic analysis of discrimination, observed:
Racial discrimination pervades every aspect of a society in which it is
found. It is found above all in attitudes of both races, but also in social
relations, in intermarriage, in residential location, and frequently in
legal barriers. It is also found in levels of economic accomplishment;
this is income, wages, prices paid, and credit extended.126
This Chapter explores the data and literature relevant to how discrimination in the
City of Fort Worth's ("the City") market and throughout the wider economy affects
the ability of minorities and women to fairly and fully engage in the City's contract
opportunities. First, we analyzed the rates at which M/WBEs in the Dallas -Fort
Worth metropolitan area form firms and their earnings from those firms.127 Next,
we looked at the number of sales and receipts, number of employees and payroll
for M/WBE firms in the State of Texas. Then, we summarized the literature on bar-
riers to equal access to commercial credit. Finally, we summarized the literature
on barriers to equal access to human capital. All three types of evidence have been
found by the courts to be relevant and probative of whether a government will be
a passive participant in discrimination without some types of affirmative interven-
tion.
A key element to determine the need for government intervention through con-
tract goals in the sectors of the economy where the City procures goods and ser-
vices is an analysis of the extent of disparities in those sectors independent of the
agency's intervention through its contracting affirmative action programs.
The courts have repeatedly held that analysis of disparities in the rates at which
M/WBEs in the government's markets form businesses compared to similar non-
126. Arrow, Kenneth J., "What Has Economics to say about racial discrimination?" Journal of Economic Perspectives, (1998),
12(2), pp. 91-100.
127. The Dallas -Fort Worth metropolitan area encompassed the counties of Collin, Dallas, Denton, Ellis, Johnson, Kaufman,
Parker, and Tarrant.
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City of Fort Worth Disparity Study 2020
M/WBEs show that their earnings from such businesses, and their access to capital
markets are highly relevant to the determination of whether the market functions
properly for all firms regardless of the race or gender of their ownership.128 These
analyses contributed most recently to the successful defense of the Illinois Toll-
way's Disadvantaged Business Enterprise (DBE) Program.129 As explained by the
Tenth Circuit in upholding the U.S. Department of Transportation's DBE program,
this type of evidence
demonstrates the existence of two kinds of discriminatory barriers to
minority subcontracting enterprises, both of which show a strong link
between racial disparities in the federal government's disbursements
of public funds for construction contracts and the channeling of those
funds due to private discrimination. The first discriminatory barriers are
to the formation of qualified minority subcontracting enterprises due
to private discrimination, precluding from the outset competition for
public construction contracts by minority enterprises. The second
discriminatory barriers are to fair competition between minority and
non -minority subcontracting enterprises, again due to private
discrimination, precluding existing minority firms from effectively
competing for public construction contracts. The government also
presents further evidence in the form of local disparity studies of
minority subcontracting and studies of local subcontracting markets
after the removal of affirmative action programs... The government's
evidence is particularly striking in the area of the race -based denial of
access to capital, without which the formation of minority
subcontracting enterprises is stymied.""
Business discrimination studies and lending studies are relevant and probative
because they show a strong link between the disbursement of public funds and
the channeling of those funds due to private discrimination.
"Evidence that private discrimination results in barriers to business formation is
relevant because it demonstrates that M/WBEs are precluded at the outset from
competing for public construction contracts. Evidence of barriers to fair competi-
tion is also relevant because it again demonstrates that existing M/WBEs are pre-
cluded from competing for public contracts."131
128. See the discussion in Chapter II of the legal standards applicable to contracting affirmative action programs.
129. Midwest Fence Corp. v. Illinois Department of Transportation, Illinois State Toll Highway Authority et al, 840 F.3d 942 (7"
Cir. 2016) (upholding the Illinois Tollway's program for state funded contracts modeled after Part 26 and based on CHA's
expert testimony, including about disparities in the overall Illinois construction industry); see also Builders Association of
Greater Chicago v. City of Chicago, 298 F.Supp.2d 725 (N.D. III. 2003) (holding that the City of Chicago's M/WBE program
for local construction contracts met the compelling interest prong using this framework).
130. Adarand Constructors, Inc. v. Slater, 228 F.3d 1147, 1168-1169 (10" Cir. 2000), cert. granted, 532 U.S. 941, then dis-
missed as improvidently granted, 534 U.S. 103 (2001) ("Adarand VII").
131. Id.
100 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
Despite the contentions of plaintiffs that possibly dozens of factors might influ-
ence the ability of any individual to succeed in business, the courts have rejected
such impossible tests and held that business formation studies are not flawed
because they cannot control for subjective descriptions such as "quality of educa-
tion", "culture" and "religion".
For example, in unanimously upholding the USDOT DBE program, the courts agree
that disparities between the earnings of minority -owned firms and similarly situ-
ated non -minority owned firms and the disparities in commercial loan denial rates
between Black business owners compared to similarly situated non -minority busi-
ness owners are strong evidence of the continuing effects of discrimination.132
The Eighth Circuit Court of Appeals took a "hard look" at the evidence Congress
considered, and concluded that the legislature had
spent decades compiling evidence of race discrimination in
government highway contracting, of barriers to the formation of
minority -owned construction businesses, and of barriers to entry. In
rebuttal, [the plaintiffs] presented evidence that the data were
susceptible to multiple interpretations, but they failed to present
affirmative evidence that no remedial action was necessary because
minority -owned small businesses enjoy non-discriminatory access to
and participation in highway contracts. Thus, they failed to meet their
ultimate burden to prove that the DBE program is unconstitutional on
this ground.133
Likewise, in holding that the DBE program regulations meet strict scrutiny, the
court in the Western States opinion relied on the "substantial body of statistical
and anecdotal materials" considered by Congress, including studies based on Cen-
sus data that provide "ample" evidence of barriers to the formation of minority -
owned firms in the transportation contracting industry.134
This type of court -approved analysis is especially important for an agency such as
the City, which has been implementing versions of an M/WBE program for many
years. The City's remedial market interventions through the use of contract goals
may ameliorate the disparate impacts of marketplace discrimination in the
agency's own contracting activities. Put another way, the program's success in
moving towards parity for minority and women firms may be "masking" the
132. Northern Contracting, Inc. v. Illinois Department of Transportation, 2005 U.S. Dist. LEXIS 19868, at *64 (Sept. 8, 2005).
133. Sherbrooke Turf, Inc. v. Minnesota Department of Transportation, 345 F.3d. 964, 970 (8th Cir. 2003), cert. denied, 541
U.S. 1041 (2004); see also Adarand Vll, 228 F.3d at 1175 (plaintiff has not met its burden "of introducing credible, partic-
ularized evidence to rebut the government's initial showing of the existence of a compelling interest in remedying the
nationwide effects of past and present discrimination in the federal construction procurement subcontracting mar-
ket.").
134. Western States Paving Co., Inc. v. Department of Transportation, 407 F.3d 983, 993 (9th Cir. 2005), cert. denied, 546 U.S.
1170 (2006).
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City of Fort Worth Disparity Study 2020
effects of discrimination that otherwise would result in disparities in M/WBE utili-
zation that mirror that of the overall economy.
To explore the question of whether firms owned by Non -Whites and White
Women face disparate treatment in the City's marketplace outside of City con-
tracts, we examined the U.S. Bureau of the Census' American Community Survey
which allows us to examine disparities using individual entrepreneurs as the basic
unit of analysis.135 We used the nine -county Dallas Fort Worth metropolitan area
as the geographic unit of analysis.
We found disparities in wages, business earnings and business formation rates for
minorities and women in all industry sectors in the City of Fort Worth's market-
place.
B. Disparate Treatment in the Marketplace: Evidence
from the Census Bureau"s 2014 - 2018 American
Community Survey
As discussed in the beginning of this Chapter, the key question is whether firms
owned by Non -Whites and White Women face disparate treatment in the market-
place without the intervention of the City's programs. In this section, we explore
this and other aspects of this question using the Census Bureau's American Com-
munity Survey data. One element asks if demographic differences exist in the wage
and salary income received by private sector workers. Beyond the issue of bias in
the incomes generated in the private sector, this exploration is important for the
issue of possible variations in the rate of business formation by different demo-
graphic groups. One of the determinants of business formation is the pool of
financial capital at the disposal of the prospective entrepreneur. The size of this
pool is related to the income level of the individual either because the income
level impacts the amount of personal savings that can be used for start-up capital
or the income level affects one's ability to borrow funds. Consequently, if particu-
lar demographic groups receive lower wages and salaries, then they would have
access to a smaller pool of financial capital, and thus reduce the likelihood of busi-
ness formation.
The American Community Survey ("ACS") Public Use Microdata Sample ("PUMS") is
useful in addressing these issues. The ACS is an annual survey of one percent of
the population and the PUMS provides detailed information at the individual level.
In order to obtain robust results from our analysis, we used the file that combines
the most recent data available for the years 2014 through 2018.136 With this rich
135. Data from 2014 - 2018 American Community Survey are the most recent for a five-year period.
136. For more information about the ACS PUMS, see http://www.census.gov/acs/.
102 O 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
data set, our analysis can establish with greater certainty any causal links between
race, gender and economic outcomes.
Often, the general public sees clear associations between race, gender, and eco-
nomic outcomes and assumes this association reflects a tight causal connection.
However, economic outcomes are determined by a broad set of factors, including
and extending beyond, race and gender. To provide a simple example, two people
who differ by race or gender may receive different wages. This difference may sim-
ply reflect that the individuals work in different industries. If this underlying differ-
ence is not known, one might assert the wage differential is the result of race or
gender difference. To better understand the impact of race or gender on wages, it
is important to compare individuals of different races or genders who work in the
same industry. Of course, wages are determined by a broad set of factors beyond
race, gender, and industry. With the ACS PUMS, we have the ability to include a
wide range of additional variables such as age, education, occupation, and state of
residence in the analysis.
We employ a multiple regression statistical technique to process this data. This
methodology allows us to obtain two results: an estimation of how variations in
certain characteristics (called independent variables) will impact the level of some
particular outcome (called a dependent variable), and a determination of how
confident we are that the estimated variation is statistically different from zero.
We have provided more detail on this technique in Appendix A.
With respect to the first step of the regression analysis, we will examine how vari-
ations in the race, gender, and industry of individuals impact the wages and other
economic outcomes received by individuals. The technique allows us to determine
the effect of changes in one variable, assuming that the other determining vari-
ables are the same. That is, we compare individuals of different races, but of the
same gender and in the same industry; or we compare individuals of different gen-
ders, but of the same race and the same industry; or we compare individuals in dif-
ferent industries, but of the same race and gender. We are determining the
impact of changes in one variable (e.g., race, gender or industry) on another vari-
able (wages), "controlling for' the movement of any other independent variables.
With respect to the second step of the regression analysis, we will determine the
statistical significance of the relationship between the dependent variable and
independent variable. For example, the relationship between gender and wages
might exist, but we find that it is not statistically different from zero. In this case,
we are not confident that there is any relationship between the two variables. If
the relationship is not statistically different from zero, then a variation in the inde-
pendent variable has no impact on the dependent variable. The regression analysis
allows us to say with varying degrees of statistical confidence that a relationship is
different from zero. If the estimated relationship is statistically significant at the
0.05 level, that indicates we are 95 percent confident that the relationship is dif-
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City of Fort Worth Disparity Study 2020
ferent from zero; if the estimated relationship is statistically significant at the 0.01
level, that indicates we are 99 percent confident that the relationship is different
from zero; if the estimated relationship is statistically significant at the 0.001 level,
that indicates we are 99.9 percent confident that the relationship is different from
zero.137
In the following presentation of results, each sub -section first reports data on the
share of a demographic group that forms a business (business formation rates);
the probabilities that a demographic group will form a business relative to White
men (business formation probabilities); the differences in wages received by a
demographic group relative to White men (wage differentials); and the differences
in business earnings received by a demographic group relative to White men (busi-
ness earnings differentials).
1. All Industries Combined in the Dallas Fort Worth Metropolitan
Area
One method of exploring differences in economic outcomes is to examine the
rate at which different demographic groups form businesses. We developed
these business formation rates using data from the U.S. Bureau of the Census'
American Community Survey. Table 5-1 presents these results. The table indi-
cates that White men have higher business formation rates compared to Non -
Whites and White Women. Table 5-2 utilizes probit regression analysis to
examine the probability of forming a business after controlling for important
factors beyond race and gender.138 This table indicates that Non -Whites
(except for Asian/Pacific Islanders) and White Women are less likely to form
businesses compared to similarly situated White men. The reduced probabili-
ties of business formation ranged from 3.3 percent for Blacks to 1.2 percent
for Others. These results were statistically significant at the 0.001 level for
Blacks, Hispanics, and White women.
Another way to measure equity is to examine how the wage and salary
incomes and business earnings of particular demographic groups compare to
White men. Multiple regression statistical techniques allowed us to examine
the impact of race and gender on economic outcomes while controlling for
other factors, such as education and age.139 Tables 5-3 and 5-4 present this
data on wage and salary incomes and business earnings respectively. Table 5-3
indicates that Non -whites and White women earn less than White men. The
reduction in earnings ranges from 40.3 percent to 18.2 percent and all of the
137. Most social scientists do not endorse utilizing a confidence level of less than 95 percent. Appendix C explains more
about statistical significance.
138. Appendix B provides a "Further Explanation of Probit Regression Analysis."
139. See Appendix A for more information on multiple regression statistical analysis.
104 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disoarity Study 2020
results are statistically significant at the 0.001 level. Table 5-4 indicates that
except for Asian/Pacific Islanders, Non -whites and White women receive busi-
ness earnings less than White men. The reduction in earnings ranges from
223.0 percent to 17.4 percent.140
Table 5-1: Business Formation Rates
All Industries, 2014 - 2018141
Demographic
Black
1.7%
Hispanic
1.9%
Native American
4.0%
Asian/Pacific Islander
5.2%
Other
3.9%
White Women
3.3%
Non -White Male
2.5%
White Male
5.7%
Source: CHA calculations from the American Community Survey.
140. The proper way to interpret a coefficient that is less than negative 100 percent (e.g., the value of the coefficient for
Other in Table 4-4), is the percentage amount non-M/WBEs earn that is more than the group in question. In this case,
non-M/WBEs earn 223 percent more than Others.
141. Statistical significance tests were not conducted on basic business formation rates.
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Table 5-2: Business Formation Probabilities Relative to White Males
All Industries, 2014 - 2018
Demographic
Black
Probability
Men
-3.3%***
Hispanic
-2.3%***
Native American
-----a
Asian/Pacific Islander
0.1%
Other
-----
White Women
-2.0%***
a. Many times, there were not sufficient observations in
the sampled data to conduct a reliable statistical analy-
sis. In these instances, the tables will contain the symbol
---" There were only 15 observations for Native Ameri-
cans and 14 for Others. For the balance of the ACS anal-
ysis, we will not provide estimates concerning business
outcomes for these two groups. We will report on esti-
mates for wage outcomes for these groups where possi-
ble.
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
Table 5-3: Wage Differentials for Selected Groups Relative to White Men
All Industries, 2014 - 2018
Demographic Group
Wages Relative to White
Black
-35.4%***
Hispanic
-18.2%***
Native American
-35.3%***
Asian/Pacific Islander
-34.3%***
Other
-40.3%***
White Women
-31.9%***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
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Table 5-4: Business Earnings Differentials for Selected Groups Relative to White
Men
All Industries
Demographic Group
Black
Earnings Relative to White
-53.5%**
Hispanic
-23.3%
Native American
-----
Asian/Pacific Islander
31.1%
Other
-----
White Women
-55.2%***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
** Indicates statistical significance at the 0.01 level.
2. The Construction Industry in the Dallas Fort Worth Metropolitan
Area
Table 5-5 indicates that White men have higher business formation rates com-
pared to Non -Whites and White Women. Table 5-6 indicates that Non -Whites
(except for Asian/Pacific Islanders) and White Women are less likely to form
businesses compared to similarly situated White men. The reduced probabili-
ties of business formation ranged from 3.9 percent to 2.5 percent. Table 5-7
indicates that Non -whites and White women earn less than White men. The
statistically significant reductions in earnings range from 8.4 percent to 58.5
percent. Table 5-8 indicates that none of the business coefficient were statisti-
cally significant.
Table 5-5: Business Formation Rates
Construction, 2014 - 2018
Demographic
Black
6.6%
Hispanic
2.9%
Native American
-----
Asian/Pacific Islander
9.1%
Other
-----
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White Women
7.9%
Non -White Male
3.7%
White Male
11.1%
Source: CHA calculations from the American Community Survey.
Table 5-6: Business Formation Probability Differentials for Selected Groups
Relative to White Men, Construction, 2014 - 2018
Probability
Demographic Group
Business Relative to White
Men
Black
-2.5%
Hispanic
-3.3%***
Native American
-----
Asian/Pacific Islander
0.5%
Other
-----
White Women
-3.9%***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
Table 5-7: Wage Differentials for Selected Groups Relative to White Men
Construction, 2014 - 2018
Demographic Group
Wages Relative to White
Black
-32.3%***
Hispanic
-8.4%***
Native American
-58.5%**
Asian/Pacific Islander
-48.4%***
Other
-15.4%
White Women
-21.3%***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
** Indicates statistical significance at the 0.01 level.
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Table 5-8: Business Earnings Differentials for Selected Groups Relative to White
Men
Construction, 2014 - 2018
Demographic
Black
23.0%
Hispanic
-30.2%
Native American
-----
Asian/Pacific Islander
-71.6%
Other
-----
White Women
38.2%
Source: CHA calculations from the American Community Survey.
3. The Construction -Related Services Industry in the Dallas Fort
Worth Metropolitan Area
In addition to the low number of Native American and Other firms mentioned
in footnote 17, there were low numbers of Blacks (6), Hispanics (10), Asians
(3), and White women (7) sampled in the construction -related services indus-
try. Consequently, reliable estimates could not be made for these groups.
Table 5-11 indicates that Non -whites (except for Native Americans) and White
women earn less than White men.
Table 5-9: Business Formation Rates
Construction -Related Services, 2014 - 2018
Demographic
Black
-----
Hispanic
-----
Native American
-----
Asian/Pacific Islander
-----
Other
-----
White Women
-----
Non-White Male
4.0%
White Male
7.3%
Source: CHA calculations from the American Community Survey.
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Table 5-10: Business Formation Probability Differentials for Selected Groups
Relative to White Men, Construction -Related Services, 2014 -
2018
Demographic Group
Probability of Forming a
Business Relative to White
Men
Native American
Asian/Pacific Islander
Source: CHA calculations from the American Community Survey.
Table 5-11: Wage Differentials for Selected Groups Relative to White Men
Construction -Related Services, 2014 - 2018
Irgraphic Group
Black
Wages Relative to White
Men (% Change)
-7.4%
Hispanic
-7.1%
Native American
6.3%
Asian/Pacific Islander
-15.1%
Other
-16.8%
White Women
-30.5%
Source: CHA calculations from the American Community Survey.
Table 5-12: Business Earnings Differentials for Selected Groups Relative to
White Men
Construction -related Services, 2014 - 2018
110
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City of Fort Worth Disparity Study 2020
Source: CHA calculations from the American Community Survey.
4. The Goods Industry in Dallas Fort Worth Metropolitan Area
Table 5-13 indicates that White men have higher business formation rates
except Asian/Pacific Islanders. Table 5-14 indicates that only one result is sta-
tistically significant (Asian/Pacific Islander). Table 5-15 indicates that statisti-
cally significant results are found for four groups (Black; Hispanic; Asian/Pacific
Islanders; and White Women) and all indicate lower wages relative to White
men. Table 5-16 indicates that none of the coefficients for business earnings
were statistically significant.
Table 5-13: Business Formation Rates
Goods, 2014 - 2018
Demographic
Black
1.0%
Hispanic
1.3%
Native American
-----
Asian/Pacific Islander
7.5%
Other
-----
White Women
2.8%
Non -White Male
2.1%
White Male
3.5%
Source: CHA calculations from the American Community Survey.
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Table 5-14: Business Formation Probabilities Relative to White Males
Goods, 2014 - 2018
Demographic
Black
Probability
Men
-1.9%*
Hispanic
-1.3%*
Native American
-----
Asian/Pacific Islander
3.8%***
Other
-----
White Women
-0.7%
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
* Indicates statistical significance at the 0.05 level.
Table 5-15: Wage Differentials for Selected Groups Relative to White Men
Goods, 2014 - 2018
Demographic Group
Black
Wages Relative to White
-36.2%***
Hispanic
-20.2%***
Native American
-25.1%
Asian/Pacific Islander
-40.2%***
Other
38.2%
White Women
-35.7%***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
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Table 5-16: Business Earnings Differentials for Selected Groups Relative to
White Men
Goods, 2014 - 2018
Demographic
Black
-368.0%*a
Hispanic
137.0%
Native American
-----
Asian/Pacific Islander
-134.0%
Other
-----
White Women
-3.9%
a. The proper way to interpret a coefficient that is less
than -100 percent, such as the value of the coefficient
for Blacks in Table 5-16, is the percentage represents the
amount non-M/WBEs earn that is more than the group
in question. In this case, non-M/WBE firms earn 368
percent more than Black firms.
Source: CHA calculations from the American Community Survey.
* Indicates statistical significance at the 0.05 level.
S. The Services Industry in Dallas Fort Worth Metropolitan Area
Table 5-17 indicates that White men have higher business formation rates
compared to Non -Whites and White Women. Table 5-18 indicates that Non -
Whites and White Women are less likely to form businesses compared to simi-
larly situated White men and three of the coefficients are statistically signifi-
cant at the 0.001 level. Table 5-19 indicates that Non -whites and White
women earn less than White men. Table 5-20 indicates that business earnings
for Non -whites and White women are less than White men except for Asian
firms.
Table 5-17: Business Formation Rates
Services, 2014 - 2018
Demographic
Black
1.8%
Hispanic
1.8%
Native American
-----
Asian/Pacific Islander
5.4%
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City of Fort Worth Disparity Study 2020
Other
ss Formation Rates
-----
White Women
4.2%
Non -White Male
2.9%
White Male
7.6%
Source: CHA calculations from the American Community Survey.
Table 5-18: Business Formation Probability Differentials for Selected Groups
Relative to White Men, Services, 2014 - 2018
Demographic
Black
Probability
Men
-4.1%***
Hispanic
-2.8%***
Native American
-----
Asian/Pacific Islander
-0.7%*
Other
-----
White Women
-2.2%***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
* Indicates statistical significance at the 0.05 level.
Table 5-19: Wage Differentials for Selected Groups Relative to White Men
Services, 2014 - 2018
Demographic Group
Black
Wages Relative to White
-33.6%***
Hispanic
-16.1%***
Native American
-34.2%***
Asian/Pacific Islander
-31.0%***
Other
-44.7%* * *
White Women
***
-30.5%
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
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Table 5-20: Business Earnings Differentials for Selected Groups Relative to
White Men
Services, 2014 - 2018
Demographic Group
Black
Earnings Relative to White
-79.0%**
Hispanic
-24.9%
Native American
-----
Asian/Pacific Islander
20.8%
Other
-----
White Women
-89.8/0***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
** Indicates statistical significance at the 0.01 level.
6. The Information Technology Industry in the Dallas Fort Worth
Metropolitan Area
In addition to the limitations due to insufficient observations mentioned in
footnote 17, there were only 8 Black business observations which impacted
the ability to analyze firm activity for Black firms in this industry. Table 5-21
indicates that White men have higher business formation rates compared to
Non -Whites and White Women. Table 4-22 indicates that none of the coeffi-
cients were statistically significant. Table 5-23 indicates that Non -whites and
White women earn less than White men and all coefficients are statistically
significant. Where analyses could be made, Table 5-24 indicates that three
business coefficients (Hispanic; Asian/Pacific Islanders; White Women) were
not statistically significant.
Table 5-21: Business Formation Rates
Information Technology, 2014 - 2018
Demographic
Black
-----
Hispanic
3.0%
Native American
-----
Asian/Pacific Islander
3.8%
Other
-----
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City of Fort Worth Disparity Study 2020
Demographic Group• •
White Women 4.0%
Non -White Male 3.1%
White Male 4.9%
Source: CHA calculations from the American Community Survey.
Table 5-22: Business Formation Probability Differentials for Selected Groups
Relative to White Men, Information Technology, 2014 - 2018
Demographic Group
Black
Probability
Business Relative to White
Men
-----
Hispanic
-0.9%
Native American
-----
Asian/Pacific Islander
-0.5%
Other
-----
White Women
-1.2%
Source: CHA calculations from the American Community Survey.
Table 5-23: Wage Differentials for Selected Groups Relative to White Men
Information Technology, 2014 - 2018
Demographic Group
Black
Wages Relative to White
-35.9%***
Hispanic
-22.4%***
Native American
-75.3%**
Asian/Pacific Islander
-17.7%***
Other
-62.5%* * *
White Women
-22.9%***
Source: CHA calculations from the American Community Survey.
*** Indicates statistical significance at the 0.001 level.
** Indicates statistical significance at the 0.01 level.
116 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disoarity Study 2020
Table 5-24: Business Earnings Differentials for Selected Groups Relative to
White Men
Information Technology, 2014 - 2018
Demographic Group
Black
Earnings Relative to White
-----
Hispanic
-56.4%
Native American
-----
Asian/Pacific Islander
30.0%
Other
-----
White Women
-87.2%
Source: CHA calculations from the American Community Survey.
C. Disparate Treatment in the Marketplace: Evidence
from the Census Bureau's 2012 Survey of Business
Owners
Every five years, the Census Bureau administers the Survey of Business Owners
("SBO") to collect data on particular characteristics of businesses that report to the
Internal Revenue Service receipts of $1,000 or more.142 The 2012 SBO was
released on December 15, 2015, so our analysis reflects the most current data
available. The SBO collects demographic data on business owners disaggregated
into the following groups:143 144
• Non -Hispanic Blacks
• Latinos
• Non -Hispanic Native Americans
• Non -Hispanic Asians
• Non -Hispanic White Women
• Non -Hispanic White Men
• Firms Equally Owned by Non -Whites and Whites
142. See http://www.census.gov/econ/sbo/a bout. htmI for more information on the Survey.
143. Race and gender labels reflect the categories used by the Census Bureau.
144. For expository purposes, the adjective "Non -Hispanic" will not be used in this chapter; the reader should assume that
any racial group referenced does not include members of that group who identify ethnically as Latino.
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City of Fort Worth Disparity Study 2020
• Firms Equally Owned by Men and Women
• Firms where the ownership could not be classified
• Publicly -Owned Firms
For purposes of this analysis, the first four groups were aggregated to form a Non -
White category. Since our interest is the treatment of Non -White -owned firms and
White Women -owned firms, the last five groups were aggregated to form one cat-
egory. To ensure this aggregated group is described accurately, we label this group
"not Non-White/Non-White Women". While this label is cumbersome, it is import-
ant to be clear this group includes firms whose ownership extends beyond White
men, such as firms that are not classifiable or that are publicly traded and thus
have no racial ownership. In addition to the ownership demographic data, the Sur-
vey also gathers information on the sales, number of paid employees, and payroll
for each reporting firm.
To examine those industry sectors in which City of Fort Worth purchases, we ana-
lyzed economy -wide SBO data on the following sectors:
• Construction
• Professional, Scientific and Technical Services
• Goods
• Other services
However, the nature of the SBO data — a sample of all businesses, not the entire
universe of all businesses— required some adjustments. In particular, we had to
define the sectors at the 2-digit North American Industry Classification System
("NAICS") code level, and therefore our sector definitions do not exactly corre-
spond to the definitions used to analyze the City's contract data in Chapter IV,
where we were able to determine sectors at the 6-digit NAICS code level. At a
more detailed level, the number of firms sampled in particular demographic and
sector cells may be so small that the Census Bureau does not report the informa-
tion, either to avoid disclosing data on businesses that can be identified or
because the small sample size generates unreliable estimates of the universe.145
We therefore report 2-digit data for purposes of this analysis.
Table 5-25 presents information on which NAICS codes were used to define each
sector.
145. Even with these broad sector definitions, there were many cases when the Census Bureau did not report information. In
these cases, the value will be entered into the table as "s"
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City of Fort Worth Disparity Study 2020
Table 5-25: 2-Digit NAICS Code Definition of Sector
a. This sector includes (but is broader than just) construction -related services. It is impossible to narrow
this category to construction -related services without losing the capacity to conduct race and gender
specific analyses.
The remainder of Section C of this chapter reports the findings of the SBO analysis.
For each sector, we present the data describing the sector and report the dispari-
ties within that sector.
1. All Industries
For a baseline analysis, we examined all industries in the State of Texas. Table
5-26 presents data on the percentage share that each group has of the total of
each of the following six business outcomes:
• The number of all firms
• The sales and receipts of all firms
• The number of firms with employees (employer firms)
• The sales and receipts of all employer firms
• The number of paid employees
• The annual payroll of employer firms
Panel A of Table 5-26 presents data for the four basic Non -White racial groups:
• Black
• Latino
• Native American
• Asian
Panel B of Table 5-26 presents data for six types of firm ownership:
• Non -white
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City of Fort Worth Disparity Study 2020
• White Women
• White Men
• Equally Non -Whites and Whites
• Equally women and men
• Firms that are publicly -owned or not classifiable
Categories in the second panel are mutually exclusive. Hence, minority firms
that are equally owned by men and women are classified as'Non-White'.
Firms that are equally owned by minorities and Whites and equally owned by
men and women are classified as 'Equally Non -White & and White'.146
Table 5-26: Percentage Demographic Distribution of Sales and Payroll Data
All Industries, 2012
Total Sales &
Number of
Firms with
&
Receipts -
All Firms
Number of Receipts -
Firms
Paid
with Paid
Number of
Paid
Annual
payroll
All Firms
(All Firms) 000(Employer(Employer
EmployeesSales
..
Firms)
Firms)
iii
Panel A: Distribution of Non -White Firms
Black 8.89% 0.32%
2.36%
0.22%
0.85%
0.49%
Latino
29.17%
2.51%
12.69%
1.92%
5.25%
3.53%
Native
0.64%
0.08%
0.54%
0.07%
0.17%
0.13%
American
Asian
6.46%
1.72%
10.35%
1.60%
3.29%
2.18%
Panel B: Distribution
of All Firms
Non -White
45.42%
4.74%
26.27%
3.90%
9.71%
6.48%
White Women
16.39%
2.56%
12.98%
2.31%
5.00%
4.08%
White Men
29.87%
19.83%
42.92%
19.27%
26.19%
25.64%
Equally Non-
o
1.07/0
0
0.37/0
0
1.74/0
0
0.33/0
0
0.78/0
0
0.55/0
White & White
146. Some of the figures in Panel B may not correspond to the related figures in Panel A because of discrepancies in how the
SBO reports the data.
120 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disoarity Study 2020
Source: CHA calculations from Survey of Business Owners.
Since the central issue is the possible disparate treatment of Non -White and
White Women firms, Table 5-27 re -aggregates the last four groups —White
men; equally Non -White and White; equally women and men; and firms not
classifiable —into one group: Not Non-White/Not White Women.147 We then
present the shares each group has of the six indicators of firm utilization.
These data were then used to calculate three disparity ratios, presented in
Table 5-28:
Ratio of sales and receipts share for all firms over the share of total
number of all firms.
Ratio of sales and receipts share for employer firms over the share of total
number of employer firms.
Ratio of annual payroll share over the share of total number of employer
firms.
For example, the disparity ratio of sales and receipts share for all firms over the
share of total number of all firms for Black firms is 3.62 percent (as shown in
Table 5-28). This is derived by taking the Black share of sales and receipts for all
firms (0.3 percent) and dividing it by the Black share of total number of all
firms (8.9 percent) that are presented in Table 5-27. If Black -owned firms
earned a share of sales equal to their share of total firms, the disparity would
have been 100 percent. An index less than 100 percent indicates that a given
group is being utilized less than would be expected based on its availability,
and courts have adopted the Equal Employment Opportunity Commission's
"80 percent" rule that a ratio less than 80 percent presents a prima facie case
147. Again, while a cumbersome nomenclature, it is important to remain clear that this category includes firms other than
those identified as owned by White men.
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City of Fort Worth Disparity Study 2020
of discrimination.148 All disparity ratios for Non -White firms and White
Women firms are below this threshold.149 Examining Table 5-28, 17 of the 18
disparity ratios for Non -White firms and White Women firms are below the 80
percent threshold.
Table 5-27: Demographic Distribution of Sales and Payroll Data — Aggregated
Groups
All Industries, 2012
Total Sales &
Number of
Firms with
Sales &
Receipts -
All Firms
Number of
Annual
Number of Receipts -
Firms All Firms
(All Firms) ($1,000)
Paid
Employees
(Employer
with Paid
Employees
(Employer
Paid
Employees
payroll
($1,000)
Firms)
Firms)
($1,000)
Panel A: Distribution of Non -White Firms
Native
MMMMMM
American
Panel B: Distribution of All Firms
Not •
White Women
AII Firms 100.0% 100.0%
100.0%
100.0%
100.0%
100.0%
Source: CHA calculations from Survey of Business Owners.
148. 29 C.F.R. § 1607.4(D) ("A selection rate for any race, sex, or ethnic group which is less than four -fifths (4/5) (or eighty
percent) of the rate for the group with the highest rate will generally be regarded by the Federal enforcement agencies
as evidence of adverse impact, while a greater than four -fifths rate will generally not be regarded by Federal enforce-
ment agencies as evidence of adverse impact.").
149. Because the data in the subsequent tables are presented for descriptive purposes, significance tests on these results are
not conducted.
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Table 5-28: Disparity Ratios of Firm Utilization Measures
All Industries, 2012
Ratio of Sales to
Number of Firms
Ratio of Sales to
Number of Firms
(Employer
Ratio of Payroll
to Number of
(All Firms)
Panel A: Disparity Ratios for Non -White
Firms)
Firms
Employer Firms
ds
Native American
Panel B: Disparity Ratios
for All Firms
I
Not • Non -White/
Not - Women
AII Firms qqlr
100.0% 1V100.0%
100.0%
Source: CHA calculations from Survey of Business Owners.
This same approach was used to examine the construction, professional, scien-
tific and technical services, goods, and other services sectors. The following are
summaries of the results of the disparity analyses.
2. Construction
Of the 16 disparity ratios for Non -White firms and White Women firms pre-
sented in Table 5-29, 12 fall under the 80 percent threshold.
Table 5-29: Disparity Ratios — Aggregated Groups
Construction, 2012
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Source: CHA calculations from Survey of Business Owners.
3. Construction -Related Services
Of the 18 disparity ratios for Non -White firms and White Women firms pre-
sented in Table 5-30, 12 are under the 80 percent threshold.
Table 5-30: Disparity Ratios — Aggregated Groups
Professional, Scientific, and Technical Services, 2012
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Source: CHA calculations from Survey of Business Owners.
4. Goods
Of the 18 disparity ratios for Non -White firms and White Women firms pre-
sented in Table 5-31, 15 fall under the 80 percent threshold.
Table 5-31: Disparity Ratios — Aggregated Groups
Goods, 2012
Ratio of Sales Ratio of Sales
toNumberof toNumberof
Firms Firms
Payroll
Number
(All Firms) (Employer
Firms)
Panel A: Disparity Ratios for Non -White Firms
Employ
Firm
•
�'.
: A '.
Native American
�����MIIYJEAM
Panel B: Disparity Ratios
for All Firms
Not Non-White/Not
White Women
AII Firms ■,
100.00%
V 100.00% ,F100.00%
Source: CHA calculations from Survey of Business Owners.
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S. Services
Of the 16 disparity ratios for Non -White firms and White Women firms pre-
sented in Table 5-32, 16 fall under the 80 percent threshold.
Table 5-32: Disparity Ratios — Aggregated Groups
Services, 2012
Ratio of Sales
to Number of
Firms
Ratio of Sales
to Number of
Firms
Ratio of
Payroll to
Number of
(All Firms)
Panel A: Disparity Ratios for Non -White Firms
(Employer
Firms)
Employer
Firms
Native American:'.
.'.
Panel B: Disparity Ratios for All Firms
Not Non-White/Not
White Women
AII Firms 100.0%
100.0%
100.0%
Source: CHA calculations from Survey of Business Owners.
D. Evidence of Disparities in Access to Business Capital
Capital is the lifeblood of any business. As presented in Chapter VI, participants in
the anecdotal data collection universally agreed to this fundamental fact. The
interviews with business owners conducted as part of this Study confirmed that
small firms, especially minority- and women -owned firms, had difficulties obtain-
ing needed working capital to perform on the City's contracts and subcontracts, as
well as expand the capacities of their firms. As discussed above, discrimination
may even prevent firms from forming in the first place.
There is an extensive body of scholarly work on the relationship between personal
wealth and successful entrepreneurship. There is a general consensus that dispari-
ties in personal wealth translate into disparities in business creation and owner-
ship.150
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The Federal Reserve Board and the U.S. Small Business Administration have con-
ducted surveys of discrimination in the small business credit market for 1993,
1998 and 2003. These Surveys of Small Business Finances ("SSBF") are based on a
large representative sample of firms with fewer than 500 employees. The main
finding from these Surveys is that MBEs experience higher loan denial probabilities
and pay higher interest rates than white -owned businesses, even after controlling
for differences in credit worthiness and other factors. Blacks, Hispanics and Asians
were more likely to be denied credit than Whites, even after controlling for firm
characteristics like credit history, credit score and wealth. Blacks and Hispanics
were also more likely to pay higher interest rates on the loans they did receive.151
A recent report to the U.S. Department of Commerce summarizes these Surveys,
results from the Kauffman Firm Survey,152 data from the U.S. Small Business
Administration's Certified Development Company/504 Guaranteed Loan Pro-
gram153 and additional extensive research on the effects of discrimination on
opportunities for MBEs. The most comprehensive report of its kind, "Disparities in
Capital Access Between Minority and Non -Minority Owned Businesses: The Trou-
bling Reality of Capital Limitations Faced by MBEs", found that
Low levels of wealth and liquidity constraints create a substantial
barrier to entry for minority entrepreneurs because the owner's wealth
can be invested directly in the business, used as collateral to obtain
business loans or use to acquire other businesses.... [T]he largest single
actor explaining racial disparities in business creation rates are
differences in asset levels."154
Some of the key findings of the Report include:
• Minority -owned firms are less likely to receive loans than non -minority
owned firms regardless of firm size. According to an analysis of data from the
Survey of Small Business Finances, for firms with gross receipts over
$500,000, 52 percent of non -minority owned firms received loans compared
to 41 percent of minority -owned firms.
150. See, e.g., Evans, David S. and Jovanovic, Boyan, "An Estimated Model of Entrepreneurial Choice under Liquidity Con-
straints," Journal of Political Economy, (1989); Evans, David S. and Leighton, Linda "Some empirical aspects of entrepre-
neurship," American Economic Review, (1989).
151. See Blanchflower, D. G., Levine. P. and Zimmerman, D., "Discrimination In The Small Business Credit Market," Review of
Economics and Statistics, (2003); Cavalluzzo, K. S. and Cavalluzzo, L. C. ("Market structure and discrimination, the case of
small businesses," Journal of Money, Credit, and Banking, (1998),
152. http://www.kauffman.org/-/media/kauffman_org/research%20reports%20and%20covers/2013/06/kauffmanfirmsur-
vey2013.pdf.
153. http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/sba-loan-programs/real-estate-
and-eq.
154. Fairlie, R. W. and Robb, A., "Disparities in Capital Access Between Minority and Non -Minority Owned Businesses: The
Troubling Reality of Capital Limitations Faced by MBEs," U.S. Department of Commerce, Minority Business Development
Agency, 2010, pp. 22-23.
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City of Fort Worth Disparity Study 2020
• When minority -owned firms do receive financing, it is for less money and at a
higher interest rate than non -minority owned firms regardless of the size of
the firm. Minority -owned firms paid an average of 7.8 percent in interest
rates for loans compared to 6.4 percent for non -minority owned firms.
Among firms with gross receipts under $500,000, minority -owned firms paid
an average of 9.1 percent in interest rates compared to 6.9 percent for non -
minority owned firms.
• Minority owned firms are more likely to be denied loans. Among firms with
gross receipts under $500,000, loan denial rates for minority firms were
about three times higher, at 42 percent, compared to those of non -minority
owned firm, at 16 percent. For high sales firms, the rates of loan denial were
almost twice as high for MBEs as for non -MBEs.
• MBEs pay higher interest rates for business loans. For all firms, MBEs paid 7.8
percent on average for loans compared with 6.4 percent for non -MBEs. The
difference was smaller, but still high, between MBEs and non -MBEs with high
sales.
• Minority -owned firms receive smaller equity investments than non -minority
owned firms even when controlling for detailed business and owner
characteristics. The differences are large and statistically significant. The
average amount of new equity investments in minority -owned firms receiving
equity is 43 percent of the average of new equity investments in non -minority
owned firms. The differences were even larger for loans received by high
sales firms. Yet, venture capital funds focusing on investing in minority firms
provide returns that are comparable to mainstream venture capital firms.155
• Disparities in total investments in minority -owned firms compared to those in
non -minority owned firms grew after the first year of business operations.
According to the analysis of the data from the Kauffman Firm Survey,
minority -owned firms' investments into their firms were about 18 percent
lower in the first year of operations compared to those of non -minority
owned firms. This disparity grew in the subsequent three years of operations,
where minorities' investments into their firms were about 36 percent lower
compared to those of non -minority owned firms.
• Minority entrepreneurs face challenges (including lower family wealth and
difficulty penetrating financial markets and networks) directly related to race
that limit their ability to secure financing for their businesses.
These findings are consistent with those of the 2012 study. Examining the Survey
of Small Business Finances ("SSBF"), conducted by the Federal Reserve Board and
the U.S. Small Business Administration from 1999-20031s6 the study found that
155. See Bates, T., "Venture Capital Investment in Minority Business," Journal of Money Credit and Banking 40, 2-3 (2008).
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MBEs experience significant barriers compared to similar non-M/WBEs. When
minority -owned firms did apply for a loan, their loan requests were substantially
more likely to be denied than non -minorities, even after accounting for differ-
ences such as firm size and credit history. Loan denial rate ranged from 8 to 24
percentage points higher than for non -minority male -owned small businesses.
When minority -owned firms did receive a loan, they were obligated to pay higher
interest rates on the loans than comparable non -minority owned firms. These
results strongly suggest that MBEs do not enjoy full and fair access to the credit
necessary to perform on the City's prime contracts and associated subcontractors.
E. Evidence of Disparities in Access to Human Capital
There is a strong intergenerational correlation with business ownership. The prob-
ability of self-employment is significantly higher among the children of the self-
employed. This was evident in the large number of non-M/WBEs in our interview
groups who were second or even higher generation firms doing business for the
market area. This disadvantages minorities, whose earlier generations were
denied business ownership through either de jure segregation or de facto exclu-
sion.
There is evidence that current racial patterns of self-employment are in part
determined by racial patterns of self-employment in the previous generation.157
Black men have been found to face a "triple disadvantage"; they are less likely
than White men to:
• Have self-employed fathers,
• Become self-employed if their fathers were not self-employed; and
• To follow their fathers into self-employment.158
Intergenerational links are also critical to the success of the businesses that do
form.159 Working in a family business leads to more successful firms by new own-
ers. One study found that only 12.6 percent of Black business owners had prior
work experiences in a family business as compared to 23.3 percent of White busi-
ness owners.160 This creates a cycle of low rates of minority ownership and worse
156. Fairlie, R.W. and Robb, A., Race and Entrepreneurial Success: Black-, Asian- and White -Owned Businesses in the United
States, (Cambridge: MIT Press, 2008).
157. Fairlie, R W., "The Absence of the African -American Owned Business, An Analysis of the Dynamics of Self -Employment,"
Journal of Labor Economics, (1999).
158. Hout, M. and Rosen, H. S., "Self-employment, Family Background, and Race," Journal of Human Resources 35, no.4
(2000).
159. Fairlie, R.W. and Robb, A., "Why are black -owned businesses less successful than White -owned businesses? The role of
families, inheritances, and business human capital," Journal of Labor Economics, (2007).
160. Id.
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City of Fort Worth Disparity Study 2020
outcomes being passed from one generation to the next, with the corresponding
perpetuation of advantages to White -owned firms.
Similarly, unequal access to business networks reinforces exclusionary patterns.
The composition and size of business networks are associated with self-employ-
ment rates.161 The U.S. Department of Commerce has reported that the ability to
form strategic alliances with other firms is important for success.162 M/WBEs in
our interviews reported that they felt excluded from the networks that help to cre-
ate success in the highway construction industry.
161. Allen, W. D., "Social Networks and Self -Employment," Journol of Socio-Economics 29, no.5 (2000).
162. Increasing MBE Competitiveness through strategic Alliances (Minority Business Development Agency, 2008).
130 0 2020 CH Advisors, Inc., All Rights Reserved.
VI. QUALITATIVE EVIDENCE OF
RACE AND GENDER BARRIERS
IN THE CITY OF FORT WORTH"S
MARKET
In addition to quantitative data, a disparity study should further explore anecdotal evi-
dence of experiences with discrimination in contracting opportunities and Fort
Worth's business opportunity programs. This evidence is relevant to the question of
whether observed statistical disparities in its locally funded contracts are due to dis-
crimination and not to some other non-discriminatory cause or causes, as well as the
likely efficacy of any race- and gender -neutral remedies employed by Fort Worth for
all its contracting opportunities. As discussed in Chapter II, this type of anecdotal data
has been held by the courts to be relevant and probative of whether the City contin-
ues to have a need to use narrowly tailored M/WBE contract goals to remedy the
effects of past and current discrimination and create a level playing field for contract
opportunities for all firms.
The Supreme Court has held that anecdotal evidence can be persuasive because it
"brought the cold [statistics] convincingly to life."163 Evidence about discriminatory
practices engaged in by prime contractors, agency personnel, and other actors rele-
vant to business opportunities has been found relevant regarding barriers both to
minority firms' business formation and to their success on governmental projects.164
While anecdotal evidence is insufficient standing alone, "[p]ersonal accounts of actual
discrimination or the effects of discriminatory practices may, however, vividly comple-
ment empirical evidence. Moreover, anecdotal evidence of a [government's] institu-
tional practices that exacerbate discriminatory market conditions are [sic] often
particularly probative."165 "[W]e do not set out a categorical rule that every case must
rise or fall entirely on the sufficiency of the numbers. To the contrary, anecdotal evi-
dence might make the pivotal difference in some cases; indeed, in an exceptional
case, we do not rule out the possibility that evidence not reinforced by statistical evi-
dence, as such, will be enough."166
163. International Brotherhood of Teamsters v. United States, 431 U.S. 324, 399 (1977).
164. Adarand Constructors, Inc. v. Slater, 228 F.3d 1147, 1168-1172 (10" Cir. 2000), cert. granted, 532 U.S. 941, then dis-
missed as improvidently granted, 534 U.S. 103 (2001).
165. Concrete Works of Colorado, Inc. v. City and County of Denver, 36 F.3d 1513, 1120, 1530 (10th Cir. 1994).
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There is no requirement that anecdotal testimony be "verified" or corroborated, as
befits the role of evidence in legislative decision -making, as opposed to judicial pro-
ceedings. "Plaintiff offers no rationale as to why a fact finder could not rely on the
State's'unverified' anecdotal data. Indeed, a fact finder could very well conclude that
anecdotal evidence need not —indeed cannot —be verified because it 'is nothing more
than a witness' narrative of an incident told from the witness' perspective and includ-
ing the witness' perception."167 Likewise, the Tenth Circuit held that "Denver was not
required to present corroborating evidence and [plaintiff] was free to present its own
witnesses to either refute the incidents described by Denver's witnesses or to relate
their own perceptions on discrimination in the Denver construction industry."168
To explore this type of anecdotal evidence of possible discrimination against minori-
ties and women in the City's geographic and industry markets and the effectiveness of
its current race -conscious and race -neutral measures, we conducted business owner
and stakeholder interviews, totaling eighty participants. We met with a broad cross
section of business owners from the City's geographic and industry markets. Firms
ranged in size from large national businesses to established family -owned firms to
new start-ups. We sought to explore their experiences in seeking and performing pub-
lic and private sector prime contracts and subcontracts with Fort Worth, other gov-
ernment agencies, and in the private sector. We also elicited recommendations for
improvements to Fort Worth's BIDE Program as discussed in Chapter III.
Many minority and women owners reported that while some progress has been made
in integrating their firms into public and private sector contracting opportunities
through race- and gender -conscious contracting programs, significant barriers remain.
Race- and gender -neutral approaches alone were described as unlikely to ensure a
level playing field for City contract opportunities.
A. Business Owner Interviews
The following are summaries of the issues discussed. Quotations are indented and
may have been shortened for readability. The statements are representative of
the views expressed over the many sessions by numerous participants.
Many minority and female owners reported that they still suffer from biased per-
ceptions and stereotypes about their competency and professionalism. While
sometimes subtle,169 these biases color all aspects of their attempts to obtain
contracts and to be treated equally in performing contract work.
166. Engineering Contractors Association of South Florida, Inc. v. Metropolitan Dade County, 122 F.3d 895, 926 (111h Cir.
1997).
167. H.B. Rowe Co., Inc. v. Tippett, 615 F.3d 233, 249 (4th Circ. 2010).
168. Concrete Works, 321 F.3d at 989.
169. See, e.g., http://www.sciencedirect.com/science/article/pii/SO191308509000239.
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It's still subtleties that you can't really get your hand on because there
is no sign on there [saying minorities are not welcome].
I know [the project manager for a large general contractor] well, years
and years of being here, I can still say I had push backs [as a Black
woman], because I had to convince a senior executive as to who I am in
the business and that I can do the job and in the end I ended up taking
over an excavation job because they have problems. But yet, I was not
capable of taking my full contract.
I'm not going to be belittled by nobody because I know what I can do, I
know what I bring to the table, I know how I perform. But to belittle a
company because they're minority -owned, I think it's disgusting.
Critical business and professional networks remain closed to many minority and
women entrepreneurs.
There's this systemic nature of doing business with people you know.
And we all like to do business with people we know. We know that
they'll come through. They'll be on time. They'll be under budget....
[But] the systemic aspect of familiarity for others sometimes breeds
contempt for the person trying to get in the door.
The days of racism where it said keep out or whatever, those were
easier to deal with than you are right now. Sit in the lobby of some of
these big companies and somebody of color comes and asks for
something and they're pleasant. "Good morning. How are you doing?
You can look on the website to find this." And then you see somebody
who's not of color, and I've seen this happen a lot of times, I'm not
saying every time, but I've seen a lot of times, "Oh, you need that link.
Oh, let me show you right here. Here's the link and this is how you get
it. You know, by the way, get this card here because Bobby really works
on the links and in fact, here's the cell phone number."
Breaking into the network of Fort Worth vendors was especially difficult.
I've been raised in Fort Worth my whole life and so it's still a very much
a good old boys club here in Fort Worth. I spend 90 percent of my time
in Dallas. And I live in Fort Worth.
I've been in Fort Worth for 31 years and I'm still trying to break into
Fort Worth.
Even though you are born, raised, go to Dunbar High School and
whatever else ... you're still looked at the same way. You still do not
have the capabilities to stand at the top of the line with the good old
boys.
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For those of us that are from Fort Worth, we know that it is very hard if
you are not from Fort Worth to break into the business. That's not just
construction. I mean, this is just across the board. And so, Fort Worth,
for good or bad, has always prided itself on being this very relational
town. It's still a city where people ask you first, not what college you
went to, but what high school you went to. And that's just what Fort
Worth is... Typically, if you're a Dallas firm, unless you have a long
history here, unless you've opened up an office, spent time here, built
some relationships, you're just not going to get the work and it just
doesn't flow to you.... That hurts us from a standpoint of our small
businesses because we almost kind of lock ourselves into this bubble.
And so, if we don't have MBEs that are filling certain NAICS codes and
then not here in the city, how do you get them here if they come here
and they can't build relationships? How do you foster that
environment? So, I think again, that's an issue that we have to deal
with from the community standpoint. We have to be more open to
folks that were not born here, haven't been raised here, but have come
here and are looking for opportunities and they need to be able to get
their foot in the door.
I'm a lifelong Fort Worth resident and taxpayer and it's very
disheartening that the City of Dallas has actually been a lot easier as a
small minority business. There are certain aspects of the good old boys'
club [you see] attending some of the pre -bids. You do see a lot of kind
of favoritism and partiality to the contractors that are there and some
of the City officials.
Many women business owners had experienced sexism and gender bias in the
business world that impedes their ability to flourish.
I'm a woman in a man's world.... I started my business 23 years ago, so
it was even worse than it is now.... To promote a woman's perspective
too, just being the only owner of the firm, that has its challenges.
I haven't worked with the City of Fort Worth in at least 10 years, on
purpose. Because I got tired of having to prove myself.
Why can't I be treated as professional as anybody else walking in the
room? Why is it automatically assumed, as the only woman, black
woman in there, "Oh, she must be the maid. She must be the one that's
waiting on us."
My industry it is extremely male dominant.... They say, " Oh, there's a
girl, there's a woman. What is she here for? Who does she work for?...
That's [name]. Oh, she owns her own company. She's a little bitty
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City of Fort Worth Disparity Study 2020
company. She's nothing to worry about." Well, I'm going to be silent
and deadly and they're going to watch because I'm coming.
The emphasis will be on the fact that I'm a woman in construction.
They're amazed when I show up on a project. They're like, "Why are
you here?"
I can't afford for the argument all the time, I can't afford for the proving
all the time. I'm trying to make money.
As women, we have had to prove ourselves in the marketplace. It
doesn't matter if we're in construction or whatever field we're in.... The
biggest issue I run into is that I hire a lot of contractors, and I deal with
male ego and males.
He's an older gentleman but he said, "You've got to bat your eyelashes
and say, 'I'll never catch up to you. We're just trying to do work with
you.
I could tell a contractor something that needed to be changed or done,
but they wouldn't take me seriously until a male would do that. And
then, even once I started my own company, you have to go in and you
have to be confident and aggressive. And even for the most part it's
like, "Oh, well can you send me those notes? Can you send me this
message?"
I do have my steel toe boots and all my safety gear in my car. I am not
just the face of my business. I am actually out there doing the work and
performing it. So, for a while I did get that, kind of that pre -judgment,
until I got to know some of the contractors and some of the subs
realized, Oh okay. And it's like, yeah, I carry a tape measure in my purse
and a lot of times the guys don't even have one, it's just kind of doing
small things like that it is, you do get that judgment.
They don't expect me to be able to open up the plans and go here and
go there.
They still see women as a support system. They do not see us as
business people. We are stepping out, and we are, women are coming
on. Men, I hate to put it, y'all better get ready because the women are
in the labor force, they're coming hard, and they're coming fast.
Some women reported that once they had proven themselves, sexist biases and
assumptions were overcome.
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I go out there and I work alongside them. I gain their respect, and then
once they know that I do know what I'm doing, they go, "Oh, she does
know what she's doing."
It's more like a challenge for us because we have to continually prove
ourselves. Once you've proven yourself, it's like floating through, water
turned on, on a faucet and you're easy, but you have to fight for the
proving of yourself.
A lot of men do respect us, and they go, "You know what? I'll do work
for you." I have lots of guys that call me and go, "Hey, when is the next
project we're going to do together? We really worked good together.
We know you're going to pay us. We know you're going to supply what
we need there. You know when we say, 'We need this,' you know
exactly what we need and you go get it." I think it'sjust a matter of how
you present yourself to the public, and the people you work with. Once
they get to know that you deliver, then they're going to want to do
business with you.
One woman was unconcerned about gender issues.
I have some customers who absolutely only want to talk to me and
that's it. But then I have some who are more, they want to talk to one
of my guys and that's fine with me. I don't have a problem with it as
long as they pay their bills on time and they're not discriminating
against anybody in my company.
An older woman who has succeeded had advice for younger women entering the
construction world.
If you can't stand a little bit of that when you go on a job site because
they're staring or whistling or whatever, then maybe you shouldn't be
on the job site.... That's not going to stop. You just got to toughen up
and you just got to decide if you're going to deal with it or not. And if
you refuse or don't want to do it, then don't do it.
Unequal access to business credit was cited as another obstacle to M/WBEs
obtaining City work.
People of color do not get the same credit even if their financials and
credit scores are the same.... [A white man has] got a little bit more
credit than you did. And then there was a slowdown in paid invoices,
[he's] a big GC and he floats it because he's got a little more credit. And
then people turn around, "Hey, that guy's a good business. Joe Man
Black over here, Hispanic, he doesn't know how to manage his
business." All he did was access his credit line. And if he would've had
his credit line, he could do it, too. It's like he ain't stupid. If he had a
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City of Fort Worth Disparity Study 2020
credit line, he'd access it when he needs it.... So then, [non-M/WBEs]
look like they're better business people, not because they're better
business people, but because people are carrying them.
To overcome any race- and/or gender -based barriers, the vast majority of minority
and women owners and stakeholder representatives were adamant that contract
goals are necessary to ensure they have full and fair opportunities to compete.
If it wasn't for that requirement, that MWB requirement, most of the
businesses would probably have a very difficult time staying in business
and my business, probably 80 percent of it [comes] just from these
types of governmental projects that come along and it's no way that
these primes would work with us ... on projects that did not have an
MWB requirement.
[M/WBE goals] are working, in my opinion, and it's been fascinating
how many primes and also project leads have just kind of come into
our office and said we're not looking to meet our goals, we're looking
to exceed them.
As a result of having an M/WBE program, then [prime vendors are]
encouraged to bring on and give us opportunities, which they have
done.
If the program went away, what would happen? You would lose small
businesses. One, if you don't have relationships, people do business
with who they know. If we don't have a program that says that there
has to be utilization, participation levels, whatever that is, DBE goals
MBE goals, they won't use them.
I don't know who's saying that we don't need goals and all that other
stuff. I don't know what they're smoking, but it ain't business stuff.
If I didn't have the DBE certification, we couldn't do business at the
airport. If I didn't have the WBE certification, we couldn't do business
with somebody else. So, the DBE certification got us into the City of
Dallas. It's all of those together that have built my business. I know
they're a hassle ... but it really opened up a lot of opportunities for us.
The [City] work stopped as a result [of dropping Hispanic firms from the
program]. It was not going to be helpful to [the prime proposer] to
bring on my firm, because they wouldn't get any points in the grading
of the proposals. So, therefore, I have not been able to do any work at
all since.
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The exclusion of White women from the City's program based on the recommen-
dations of an earlier disparity study had eliminated their opportunities to work on
City projects.
If the City of Fort Worth doesn't require me, then why do I need to be a
part of it?
As a WBE, that's another reason why I never got my certifications was
because Fort Worth didn't recognize it. So, I was like, "Yeah, why don't
you even do that?" So, it was four years ago, I did do all of my
certifications and I have had much more success in Dallas.
B. Conclusion
Consistent with quantitative evidence reported in this study, anecdotal interview
information suggests that minorities and women continue to suffer discriminatory
barriers to full and fair access to City of Fort Worth contracts and subcontracts.
While not definitive proof that the City should continue its race- and gender -con-
scious measures to reduce these impediments, M/WBEs' experiences are the type
of evidence that, especially when considered alongside the study's statistical
proof, the courts have found to be probative of whether Fort Worth may use nar-
rowly tailored M/WBE contract goals to address discriminatory barriers. This ele-
ment of the "strong basis in evidence" necessary for race -conscious relief also
provides guidance about what types of narrowly tailored remedies will level the
playing field for City -funded opportunities.
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V11, RECOMMENDATIONS FOR THE
CITY OF FORT WORTWS
BUSINESS DIVERSITY PROGRAM
The quantitative and qualitative data presented in this Study provide a thorough
examination of the evidence regarding the experiences of minority- and women -
owned firms operating in the City of Fort Worth's geographic and procurement mar-
kets. As required by strict scrutiny170, we analyzed evidence of such firms' utilization
by the City as measured by dollars spent. We also examined business owners' experi-
ences in obtaining City contracts and associated subcontracts, and opportunities in
the private sector. We gathered statistical and anecdotal data to provide the evidence
necessary to determine whether there is a strong basis in evidence that barriers to full
and equal contracting opportunities exist on the basis of race or gender in the City's
market area that circumscribe City contract opportunities, and if so, what narrowly
tailored remedies are appropriate.
The Study results support the City's continuing compelling interest in implementing its
race- and gender -conscious Business Diversity Enterprise ("BDE") program. The statis-
tical data and the anecdotal testimony provide a sufficient basis for the continued use
of narrowly tailored remedial race- and gender -based measures to ensure full and fair
access by all firms to City prime contracting and associated subcontracting opportuni-
ties.
We therefore suggest enhancements to the City's existing measures and new initia-
tives to increase opportunities for Minority- and Women -Owned Business Enterprises
("M/WBEs") and other small businesses. The following recommendations seek to pro-
vide guidance to ensure the programs conform to strict scrutiny and national best
practices for M/WBE programs.
170. See Chapter II.
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A. Enhance Race- and Gender -Neutral Measures
1. Implement Additional Features of the City's Electronic
Contracting Data Collection and Monitoring System
Fort Worth has recently implemented the 132Gnow electronic data collection
and monitoring system for its BIDE program. Much of the required data was
collected in the system. The City worked very hard at the beginning to clean up
the data and fill in as much missing data as possible. We therefore urge the
City to ensure that new data entry is complete to both support program
administration and reduce the amount of manual manipulation for future
studies. Data to be collected should include:
Prime vendor information: contact person with email; race and gender of
the firm's owner(s); and industry classification codes (preferably, North
American Industry Classification System codes); and amounts paid,
including any change orders.
• Non -certified subcontractor information: firm name, address with zip
code, work description; race and gender of the owner(s); industry
classification code;
• and amounts paid.
In addition to full data collection, we suggest the City implement the contract/
project -specific goal setting module available as part of the current system to
set narrowly tailored goals using the data from this Study as the starting point.
This will not only tie the program's implementation to its evidentiary basis but
also increase consistency and transparency of the contract goal setting pro-
cess.
Another enhancement of the system would be to allow prime vendors to sub-
mit verified subcontractor utilization plans online. This should reduce the time
for review of plans and the burdens of record keeping.
2. Increase Outreach to M/WBEs and Small Firms
The City currently participates in vendor fairs and other outreach events
hosted by local "sister" agencies. While M/WBEs and small firms found these
to be somewhat useful, several business owners suggested more meetings
that focused on specific City projects or for specific industries, such as engi-
neering services.
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3. Increase Contract "Unbundling"
The size and complexity of many of the City's contracts are major impediments
to M/WBEs and other small firms in obtaining work as prime contractors and
as subcontractors. Reviewing specific procurement needs through the lens of
small businesses can lead to reduced barriers across many City departments.
"Unbundling" contracts into smaller segments was endorsed by many firm
owners as one method to provide fair access to City projects. In conjunction
with reduced insurance and bonding requirements where possible, unbundled
contracts would permit smaller firms to move from quoting solely as subcon-
tractors to bidding as prime contractors. Unbundled contracts would also
enhance their subcontracting opportunities. Unbundling must be conducted,
however, within the constraints of the need to ensure efficiency and limit costs
to taxpayers, as well as any state law requirements.
4. Review Requirements
Another race- and gender -neutral approach to reduce barriers would be to
accept equivalent experience when evaluating bids or proposals that are not
awarded solely on the basis of price. This can include an individual's experi-
ence at an earlier firm, such as an owner who has transitioned from employee
to entrepreneur, or work performed on projects similar though not identical to
the services sought in the City's solicitation.
Further, the City should examine its current prequalification policies to review
the criteria so that they are no more restrictive or burdensome than is abso-
lutely necessary. It is also important to ensure that the BIDE Office is aware of
those requirements so that certified firms will not miss out on opportunities
because of a lack of coordination between City departments.
S. Provide Training to City Staff
Fort Worth has evinced a strong commitment to diversity and inclusion. The
recent installation of a Director for Diversity and Inclusion is an important step
towards further institutionalizing these values. The commissioning of this
Study is another such advance. To actualize these commitments, it will be valu-
able to provide training to City employees with responsibilities for contracting
and procurement and vendor interface on new initiatives. It is also an opportu-
nity to again stress the importance of diversity and inclusion and ensure that
the program is "owned" by all departments, notjust the Office of Business
Diversity.
For example, the City's current policy is to solicit at least two certified firms for
informal solicitations, i.e., purchase orders under $50,000.00. However, some
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concerns were raised that buyers are not always adhering to this directive.
Training should stress these and other inclusion policies to ensure understand-
ing and compliance.
In addition, the City should consider providing unconscious or implicit bias
training for all City staff.171 "Implicit bias" refers to attitudes and stereotypes
that influence judgment, decision -making, and behavior in ways that are out-
side of conscious awareness and/or control. As discussed in Chapter VI, many
minority and women business owners encounter bias and negative percep-
tions throughout the business world, including government agencies. Such
training should raise awareness and understanding to work toward making the
City of Fort Worth a model of diversity and inclusion.
B. Revise the Business Diversity Enterprise Program
The Study's results support the determination that the City has a strong basis in
evidence to implement race- and gender -conscious remedies. The record— both
quantitative and qualitative— establishes that M/WBEs in the City's market area
continue to experience significant disparities in their access to City contracts and
private sector opportunities and to those factors necessary for business success.
These findings support the inference that discrimination remains a barrier to full
and fair opportunities for all firms. Even with the use of limited contract goals for
only certain groups (based on the prior Disparity Study), M/WBEs as a group have
not reached parity on City -funded jobs. The results for Black -owned and Native -
American -owned firms are particularly stark.172
Further, the economy -wide analyses in Chapter V reveal that in the overall DFW
Metroplex economy, where contracting equity programs are rare as a portion of
total economic activity, M/WBEs experience very large and significant disparities
to full and fair chances to entrepreneurial success. For example, minorities and
women form businesses at rates well below comparable white men and earn sig-
nificantly less from the businesses they do form. Similarly, minority- and women -
owned firms experience large disparities in the ratios of their sales and their pay-
rolls relative to the number of their firms. Further, the anecdotal reports of inade-
quate access to information, biased perceptions, entrenched and closed networks,
lack of access to capital and bonding, restrictive experience requirements, and
other impediments on the basis of, or exacerbated by, race and gender would
impede M/WBEs' success on City contracts without remedial intervention.
Overall, the picture that emerges shows the continuing effects of discrimination in
creating barriers to the full and fair participation of all firms across all product mar-
171. https:Himplicit.harvard.edu.
172. Table 4-9, Disparity Ratios by Demographic Group.
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kets in the City's relevant geographic market area. While the City's program has
been successful in overcoming these barriers for some members of groups in
some industries173, the experiences of most M/WBEs in most industries, as well as
outside of contracting affirmative action programs, strongly suggests that flexible
contract goals are still warranted. Without remedial intervention to level the play-
ing field, Fort Worth might function as a "passive participant" in the "market fail-
ure" of discrimination.
We therefore recommend the continued implementation of a race- and gender -
conscious program and the inclusion of all groups for credit towards meeting con-
tract goals in all industries.
1. Use the Study to Set the M/WBE Annual Goal
The weighted availability estimates in Chapter IV should be the basis for con-
sideration of overall, annual spending targets for City funds.174 We found the
availability of M/WBEs to be 25.4 percent.
2. Use the Study to Set Narrowly Tailored Contract Specific Goals
As discussed in Chapter II, the City's constitutional responsibility is to ensure
that goals are narrowly tailored to the specifics of the project. We therefore
urge the City to jettison the current approach of a patchwork of broad industry
or category goals (i.e., construction, professional services, good and services
and architectural and engineering services) in favor of a constitutionally defen-
sible, narrowly tailored approach to contract goal setting. Not only are these
generic categories somewhat arbitrary (is a landscaping subcontract to be per-
formed as part of a building project "services" or "construction"?) but also by
not reviewing the actual scopes of work, the goal may well be inapposite to the
actual work performed. Finally, it will obviate the need to consider whether to
grant "waivers" of overall goals before the contract is advertised.
Further, goals should be set not only for subcontracting tasks but for the entire
scope of work of the project. This is the well accepted, national best practice.
To do otherwise is to remove the dollars expected to be earned by the prime
bidder from the reach of the remedial program. Not only is there no legal
requirement to constrict the program in this manner but also it is prime work
that is the most difficult for M/WBEs to achieve. A "subcontracting" only con-
tract goal locks in the very barriers sought to be overcome because it forces
M/WBE prime contractors to subcontract out work they could self -perform
173. Table 4-10, Hispanic Versus Non-M/WBE Outcomes in NAICS Code 541330 (Engineering Services; Table 4-11, Asian Ver-
sus Non-M/WBE Outcomes in NAICS Code 237310 (Highway, Street, and Bridge Construction); and Table 4-12, White
Women Versus Non-M/WBE Outcomes in NAICS Code 541330 (Engineering Services).
174. Table 4-8, Aggregated Weighted Availability for the City of Fort Worth's Contracts.
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and thereby grow their skills and revenues. This will also simplify and bolster
the legality of the administration of the program, by eliminating extra points
that are sometimes given to certified firms that depend on the form of their
contractual relationships with other parties (e.g., joint venture agreements
versus subcontracting agreements).
As discussed in Chapter II, the City's constitutional and regulatory responsibil-
ity is to ensure that its implementation of the program is narrowly tailored to
its geographic and procurement marketplace. The highly detailed availability
estimates in Chapter IV175 can serve as the starting point for narrowly tailored
contract goal setting that reflects the percentage of available M/WBEs to per-
form the specific scopes of work of the contract as a percentage of the total
pool of available firms. Several prime vendors, especially consulting firms,
questioned how the City sets its contract goals and reported that the City's
goals sometimes do not reflect the actual skills of available firms or the work
that can reasonably be subcontracted. This approach provides additional
transparency and accountability.
We therefore suggest that the City weigh the estimated scopes of the contract
by the detailed availability estimates in this Report, and then adjust the result
based on geography and current market conditions (for example, the volume
of work currently underway in the market, the entrance of newly certified
firms, specialized nature of the project, etc.).
The B2GNow electronic data collection and monitoring system contains a con-
tract goal setting module developed to utilize the study data as the starting
point. We have worked extensively with this firm to develop a simple, defensi-
ble methodology to use the study data. The unweighted availability estimates
should be weighted by the expected scopes of the particular contract, includ-
ing the prime vendor's anticipated self -performance. The results will be the
first step in setting the contract goal. The City should then review the result in
light of other factors, such as the entry of new firms into the program, other
current Houston area projects that may impact availability, progress towards
meeting the annual goals, any unique aspects to the scopes, or other relevant
factors. Any adjustment to the calculated goal should be fully documented.
Written policies explaining the contract goal setting steps should be dissemi-
nated so that all contracting actors understand the methodology. By employ-
ing the B2GNow system as the starting point for goal setting, and fully
documenting any adjustments, bidders will gain confidence that the goals are
based on demonstrable evidence and that the targets are reasonable and
achievable.
175. Table 4-6, Unweighted Availability for the City of Fort Worth's Contracts.
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We further suggest that the City no longer give evaluation "points" to M/WBEs
who submit qualifications -based proposals. This inflexible remedy may run
afoul of the court -imposed requirement that a proposer making good faith
efforts to meet the goal be treated the same way as one that might meet the
goal, since only minority or women firms can receive these points. While a
laudable attempt to provide a benefit to M/WBE prime vendors, we think the
more prudent and defensible approach would be to permit certified firms to
count their own participation towards meeting the contract goal, discussed
below.
We urge the City to bid some contracts that it determines have significant
opportunities for M/WBE participation without goals. These "control con-
tracts" can illuminate whether certified firms are used or even solicited in the
absence of goals. The development of some "unremediated markets" data, as
held by the courts, will be probative of whether M/WBE utilization is the result
of the City's program or whether barriers on the basis of race or gender have
been eliminated.
3. Count Certified Prime Vendors' Performance Towards Meeting
Contract Goals
The City's current policy prohibits certified prime M/WBEs from counting their
own participation towards contract goals. Many firms urged the City to follow
the DBE program176 and national trends and rescind this prohibition. This will
accomplish several objectives. First, it is one of the few remedies available to
remove barriers to the participation of minorities and women as prime firms,
as setasides on the basis of race or gender are unlikely to survive judicial scru-
tiny. Next, it supports the creation of additional capacity in these firms, so that
when they graduate from the program, they do not lose most (or even all) of
their work because they can no longer be counted by other prime businesses
towards meeting contract goals. Third, it clarifies that all contract dollars will
be subject to the goal, not just the dollars anticipated to be spent with subcon-
tractors. Finally, it more closely mirrors the way many industries function out-
side the operations of contracting affirmative action programs. Construction
has been the model for these programs, but othertypes of businesses often do
not utilize subcontractors on an extensive basis. Permitting certified prime
firms to count their own participation gives them the ability to grow within the
usual parameters of their industries.
176. 49 C.F.R. §26.51.
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4. Review Program Policies, Procedures and Forms
To implement the new goals and contract goal setting methodology, the City
should review all its current program components, including policies, proce-
dures and forms. We suggest the following program elements, at minimum, be
revised to reflect the findings in this Report and national best practices for M/
WBE programs:
• Specification development, including the input of the BIDE staff in
development of solicitations.
Special provisions and instructions to bidders about the program to
ensure that changes are clear, and standards and requirements are fully
spelled out, including the types of sanctions that may be imposed for non-
compliance or contract breach.
Definitions for "commercially useful function and how M/WBE
participation will be counted towards credit for meeting
contract goals.
Criteria for establishing the "good faith efforts" of bidders who
are unable to meet the goal. Standards for such "waivers" must
be clear, with a fully delineated process to appeal adverse
determinations.
Standards for contract performance, including substituting non-
performing certified firms; reporting compliance; and seeking
assistance from the BIDE Office.
Contract closeout procedures and standards for determining
that the contractor has met its affirmative action obligations.
The Office should further review its staff titles and job descriptions so that the
responsibility for each program element is clear, and bidders and other City
staff know who to contact and who to hold accountable.
Other City departments should likewise review their operations to make sure
that diversity and inclusion are incorporated into their systems and outcomes.
5. Implement the Mentor -Protege Program
Fort Worth has drafted a new Mentor -Protege initiative that has not yet been
implemented. In addition to the proposed elements, we suggest adding some
aspects of the model developed for the U.S. Department of Transportation's
Disadvantaged Business Enterprise program.177 These elements provide sup-
177. See 49 C.F.R. Part 26, Appendix D.
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port for M/WBEs while incentivizing the mentor to provide the types of assis-
tance that produces identified and achievable goals. These could include:
A description of the qualifications of the mentor, including the firm's
number of years of experience as a contractor or consultant, the
agreement to devote a specified number of hours per month to working
with the protege; and the qualifications of the lead individual responsible
for implementing the development plan.
A description of the qualifications of the protege, including the firm's
number of years of experience as a contractor or consultant; the
agreement to devote a specified number of hours per month to working
with the mentor; and the qualifications of the M/WBE owner(s).
A written City -approved development plan, which clearly sets forth the
objectives of the parties and their respective roles, the duration of the
arrangement, a schedule for meetings and development of action plans,
and the services and resources to be provided by the mentor to the
protege. The assistance provided by the mentor must be detailed and
directly relevant to City work. The development targets should be
quantifiable and verifiable —such as increased bonding capacity, increased
sales, increased areas of work specialty or prequalification—and reflect
objectives that increase the protege's capacities and expand its business
areas and expertise.
• A long term and specific commitment between the parties, e.g., 12 to 36
months.
• A provision for the use of any equipment or equipment rental.
• Extra credit for the mentor's use of the protege to meet a contract goal
(e.g., 1.25 percent for each dollar spent), with a limit on the total
percentage that could be credited on a specific contract and on total
credits available under the Plan.
• Any financial assistance by the mentor to the protege must be subject to
prior written approval by the City and must not permit the mentor to
assume control of the protege.
• A fee schedule to cover the direct and indirect cost for services provided
by the mentor for specific training and assistance to the protege.
• A provision that the Plan may be terminated by mutual consent or by the
City if the protege no longer meets the eligibility standards for M/WBE
certification; either party desires to be removed from the relationship;
either party has failed or is unable to meet its obligations under the plan;
the protege is not progressing or is not likely to progress in accordance
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with the plan; the protege has reached a satisfactory level of self-
sufficiency to compete without the plan; or the plan or its provisions are
contrary to legal requirements.
• Submission of quarterly reports to the City by the parties indicating their
progress toward each of the Plan's goals.
Regular review by the BIDE Office of the parties' compliance with the Plan
and progress towards meeting its objectives. Failure to adhere to the
terms of the Plan or to make satisfactory progress would be grounds for
termination from the Program.
These additional guidelines could apply to firms that have matured past the
stage of needing to attend contractor classes. It can also be adapted for non -
construction businesses, such as engineering and information technology
firms.
C. Conduct Regular BDE Program Reviews
To meet the requirements of strict constitutional scrutiny and ensure best prac-
tices in program administration continue to be applied, the City should conduct a
full and thorough review of the evidentiary basis for the Program approximately
every five to seven years.
A sunset date for the BIDE program, when it will end unless reauthorized, is a con-
stitutional requirement to meet the narrow tailoring test that race -and gender -
conscious measures be used only when necessary. A new disparity study or other
applicable research should be commissioned in time to meet the sunset date.
D. Develop Performance Measures for Program Success
The City should develop quantitative performance measures for overall success of
the program to evaluate its effectiveness in reducing the systemic barriers identi-
fied by the Study. This will require enhanced data collection and monitoring. In
addition to meeting goals, possible benchmarks might be:
• Progress towards meeting the overall, annual M/WBE goal.
• The number of bids or proposals, and the dollar amount of the awards and
the goal shortfall, where the bidder was unable to meet the goals and
submitted good faith efforts to do so.
The number and dollar amount of bids or proposals rejected as non-
responsive for failure to make good faith efforts to meet the goal.
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• The number, type and dollar amount of M/WBE substitutions during contract
performance.
• Increased bidding by certified firms as prime vendor.
• Increased prime contract awards to certified firms.
• Increased "capacity" of certified firms, as measured by bonding limits, size of
jobs, profitability, complexity of work, etc.
• Increased variety in the industries in which M/WBEs are awarded prime
contracts and subcontracts.
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APPENDIX A: FURTHER
EXPLANATION OF THE MULTIPLE
REGRESSION ANALYSIS
As explained in the report, multiple regression statistical techniques seek to
explore the relationship between a set of independent variables and a depen-
dent variable. The following equation is a way to visualize this relationship:
DV = f (D, 1, 0),
where DV is the dependent variable; D is a set of demographic variables; I is a
set of industry & occupation variables; and 0 is a set of other independent
variables.
The estimation process takes this equation and transforms it into:
DV=C+(Pi *D)+(P2 * 1)+(P3 * 0)+µ,
where C is the constant term; (31, (32 and P3 are coefficients, and It is the ran-
dom error term.
The statistical technique seeks to estimate the values of the constant term and
the coefficients.
In order to complete the estimation, the set of independent variables must be
operationalized. For demographic variables, the estimation used race, gender
and age. For industry and occupation variables, the relevant industry and occu-
pation were utilized. For the other variables, age and education were used.
A coefficient was estimated for each independent variable. The broad idea is
that a person's wage or earnings is dependent upon the person's race, gender,
age, industry, occupation, and education. Since this Report examined the City
of Fort Worth, the analysis was limited to data from the Dallas -Fort Worth
Metropolitan Area. The coefficient for the new variable showed the impact of
being a member of that race or gender in the county metropolitan area.
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APPENDIX 6: FURTHER
EXPLANATION OF THE PROBIT
REGRESSION ANALYSIS
Probit regression is a special type of regression analysis. While there are many
differences between the underlying estimation techniques used in the probit
regression and the standard regression analysis, the main differences from the
layperson's point of view lie in the nature of the dependent variable and the
interpretation of the coefficients associated with the independent variables.
The basic model looks the same:
DV = f(D, I, 0),
where DV is the dependent variable; D is a set of demographic variables; I is a
set of industry & occupation variables; and 0 is a set of other independent
variables.
The estimation process takes this equation and transforms it into:
DV=C+(al *D)+(a2 * 1)+(R3 * 0)+µ,
where C is the constant term; (1, Q2, and Q3 are coefficients, and is the ran-
dom error term.
In the standard regression model, the dependent variable is continuous and
can take on many values. In the probit model, the dependent variable is
dichotomous and can take on only two values: zero or one. For instance, in the
standard regression analysis, we may be exploring the impact of a change in
some independent variable on wages. In this case, the value of one's wage
might be any non -negative number. In contrast, in the probit regression analy-
sis, the exploration might be the impact of a change in some independent vari-
able on the probability that some event occurs. For instance, the question
might be how an individual's gender impacts the probability of that person
forming a business. In this case, the dependent variable has two values: zero, if
a business is not formed; one, if a business is formed.
The second significant difference —the interpretation of the independent vari-
ables' coefficients —is fairly straight -forward in the standard regression model:
the unit change in the independent variable impacts the dependent variable
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City of Fort Worth Disparity Study 2020
by the amount of the coefficient.178 However, in the probit model, the initial
coefficients cannot be interpreted this way. One additional step, which can be
computed easily by most statistical packages, must be undertaken in order to
yield a result that indicates how the change in the independent variable affects
the probability of an event (e.g., business formation) occurring. For instance,
using our previous example of the impact on gender on business formation, if
the independent variable was WOMAN (with a value of 0 if the individual was
male and 1 if the individual was female) and the final transformation of the
coefficient of WOMAN was -0.12, we would interpret this to mean that women
have a 12% lower probability of forming a business compared to men.
178. The exact interpretation depends upon the functional form of the model.
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APPENDIX C: SIGNIFICANCE LEVELS
Many tables in this Report contain asterisks indicating that a number has sta-
tistical significance at 0.001, 0.01, or 0.05 levels (sometimes, this is presented
as 99.9%; 99% and 95%, respectively) and the body of the report repeats these
descriptions. While the use of the term seems important, it is not self-evident
what the term means. This Appendix provides a general explanation of signifi-
cance levels.
This Report seeks to address the question whether non -Whites and White
women received disparate treatment in the economy relative to White males.
From a statistical viewpoint, this primary question has two sub -questions:
What is the relationship between the independent variable and the
dependent variable?
• What is the probability that the relationship between the independent
variable and the dependent variable is equal to zero?
For example, an important question facing the City as it explores whether each
racial and ethnic group and White women continue to experience discrimina-
tion in its markets is do non -Whites and White women receive lower wages
than White men? As discussed in Appendix A, one way to uncover the relation-
ship between the dependent variable (e.g., wages) and the independent vari-
able (e.g. non -Whites) is through multiple regression analysis. An example
helps to explain this concept.
Let us say, for example, this analysis determines that non -Whites receive
wages that are 35% less than White men after controlling for other factors,
such as education and industry, which might account for the differences in
wages. However, this finding is only an estimate of the relationship between
the independent variable (e.g., non -Whites) and the dependent variable (e.g.,
wages) — the first sub -question. It is still important to determine how accurate
is that estimation, that is, what is the probability the estimated relationship is
equal to zero —the second sub -question.
To resolve the second sub -question, statistical hypothesis tests are utilized.
Hypothesis testing assumes that there is no relationship between belonging to
a particular demographic group and the level of economic utilization relative
to White men (e.g., non -Whites earn identical wages compared to White men
or non -Whites earn 0% less than White men). This sometimes is called the null
hypothesis. We then calculate a confidence interval to find the probability that
the observed relationship (e.g., - 35%) is between 0 and minus that confidence
interva1.179 The confidence interval will vary depending upon the level of confi-
0 2020 CH Advisors, Inc., All Rights Reserved. 155
City of Fort Worth Disparity Study 2020
dence (statistical significance) we wish to have in our conclusion. When a num-
ber is statistically significant at the 0.001 level, this indicates that we can be
99.9% certain that the number in question (in this example, -35%) lies outside
of the confidence interval. When a number is statistically significant at the 0.01
level, this indicates that we can be 99.0% certain that the number in question
lies outside of the confidence interval. When a number is statistically signifi-
cant at the 0.05 level, this indicates that we can be 95.0% certain that the
number in question lies outside of the confidence interval.
179. Because 0 can only be greater than -35%, we only speak of "minus the confidence level". This is a one -tailed hypothesis
test. If, in another example, the observed relationship could be above or below the hypothesized value, then we would
say "plus or minus the confidence level" and this would be a two -tailed test.
156 0 2020 CH Advisors, Inc., All Rights Reserved.
APPENDIX D: ADDITIONAL DATA
FROM THE UTILIZATION
ANALYSES FOR CITY OF FORT
WORTH 180
Table D-1: Industry Percentage Distribution of Contracts by Dollars Paid
All Contracts
"35",
tal
Cumulative Pct
.
Contract Dollars
Total Contract
Dollars
237310
Highway, Street, and Bridge Construction
31.323837%
31.3%
Water and Sewer Line and Related Structures
237110
28207989%
59.5%
Construction
Commercial and Institutional Building
236220
7.720811%
67.3%
Construction
541330
Engineering Services
5.134538%
72.4%
Specialized Freight (except Used Goods)
484220
Trucking, Local
2.795617%
75.2/ °
Electrical Contractors and Other Wiring
238210
2.777696%
78.0%
Installation Contractors
Metal Service Centers and Other Metal
423510
1.946215%
79.9%
Merchant Wholesalers
Other Heavy and Civil Engineering
237990
1.832413%
81.7 °
Construction
238910
Site Preparation Contractors
1.427471%
83.2%
Plumbing, Heating, and Air -Conditioning
238220
1.399248%
84.6%
Contractors
423840
Industrial Supplies Merchant Wholesalers
1.292889%
85.9%
180. A breakdown of the unconstrained product market by Prime and Subcontractor data is not provided for FAA -funded
contracts because there are only 46 contracts in the data set. A breakdown of Non -Car Rental Contracts by Prime and
Subcontractor is not provided because the ACDBEs functioned as joint venture partners.
O 2020 CH Advisors, Inc., All Rights Reserved. 157
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
Asphalt Paving Mixture and Block
324121
Manufacturing
1.260695%
87.1%
561730
Landscaping Services
1.170192%
88.3%
327320
Ready -Mix Concrete Manufacturing
1.089406%
89.4%
Brick, Stone, and Related Construction
423320
1.068667%
90.4%
Material Merchant Wholesalers
Poured Concrete Foundation and Structure
238110
0.779956%
91.2/ °
Contractors
Structural Steel and Precast Concrete
238120
0.764404%
92.0%
Contractors
238990
All Other Specialty Trade Contractors
0.658543%
92.7%
Electrical Apparatus and Equipment, Wiring
423610
Supplies, and Related Equipment Merchant
0.625914%
93.3%
Wholesalers
484110
General Freight Trucking, Local
0.564356%
93.8%
561720
Janitorial Services
0.432614%
94.3%
238320
Painting and Wall Covering Contractors
0.337660%
94.6%
Other Foundation, Structure, and Building
238190
0.332435/0 o
94.9%
Exterior Contractors
238310
Drywall and Insulation Contractors
0.323255%
95.3%
Petroleum and Petroleum Products Merchant
424720
Wholesalers (except Bulk Stations and
0.322810%
95.6%
Terminals)
238140
Masonry Contractors
0.310830%
95.9%
238150
Glass and Glazing Contractors
0.283132%
96.2%
Surveying and Mapping (except Geophysical)
541370
0 272199%
96.5/ °
Services
238160
Roofing Contractors
0.265644%
96.7%
332312
Fabricated Structural Metal Manufacturing
0.226625%
96.9%
238390
Other Building Finishing Contractors
0.218236%
97.2%
561990
All Other Support Services
0.187125%
97.4%
444190
Other Building Material Dealers
0.176436%
97.5%
238350
Finish Carpentry Contractors
0.146979%
97.7%
158 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
N:a
NAICS Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
Construction, Mining, and Forestry Machinery
532412
and Equipment Rental and Leasing
0.143689%
97.8/ °
238330
Flooring Contractors
0.138928%
98.0%
541380
Testing Laboratories
0.137969%
98.1%
Other Construction Material Merchant
423390
0.119058%
98.2%
Wholesalers
Plumbing and Heating Equipment and Supplies
423720
0.102338%
98.3%
(Hydronics) Merchant Wholesalers
Oil and Gas Pipeline and Related Structures
237120
0.102269%
98.4%
Construction
All Other Miscellaneous Fabricated Metal
332999
0.102232%
98.5%
Product Manufacturing
562910
Remediation Services
0.088890%
98.6%
561440
Collection Agencies
0.083994%
98.7%
327332
Concrete Pipe Manufacturing
0.072283%
98.8%
238290
Other Building Equipment Contractors
0.072264%
98.8%
561320
Temporary Help Services
0.057148%
98.9%
321114
Wood Preservation
0.053605%
99.0%
221330
Steam and Air -Conditioning Supply
0.053550%
99.0%
All Other Professional, Scientific, and Technical
541990
0.052883%
99.1%
Services
331511
Iron Foundries
0.049336%
99.1%
Iron and Steel Mills and Ferroalloy
331110
0.047825%
99.2%
Manufacturing
Direct Property and Casualty Insurance
524126
0.046516%
99.2%
Carriers
333120
Construction Machinery Manufacturing
0.044743%
99.2%
339950
Sign Manufacturing
0.039911%
99.3%
562111
Solid Waste Collection
0.038027%
99.3%
Crushed and Broken Limestone Mining and
212312
o
0.037749/0
0
99.4/0
Quarrying
424710
Petroleum Bulk Stations and Terminals
0.035991%
99.4%
0 2020 CH Advisors, Inc., All Rights Reserved. 159
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
541310
Architectural Services
0.035768%
99.4%
541191
Title Abstract and Settlement Offices
0.032848%
99.5%
238340
Tile and Terrazzo Contractors
0.032263%
99.5%
332618
Other Fabricated Wire Product Manufacturing
0.029350%
99.5%
236210
Industrial Building Construction
0.027252%
99.6%
561621
Security Systems Services (except Locksmiths)
0.027127%
99.6%
314999
All Other Miscellaneous Textile Product Mills
0.026594%
99.6%
Showcase, Partition, Shelving, and Locker
337215
0.026275%
99'6 °
Manufacturing
326122
Plastics Pipe and Pipe Fitting Manufacturing
0.024743%
99.7%
Iron and Steel Pipe and Tube Manufacturing
331210
0.022781%
99.7%
from Purchased Steel
327310
Cement Manufacturing
0.021752%
99.7%
Other Farm Product Raw Material Merchant
424590
0.021080%
99.7%
Wholesalers
454310
Fuel Dealers
0.020129%
99.7%
327410
Lime Manufacturing
0.019542%
99.8%
321918
Other Millwork (including Flooring)
0.013530%
99.8%
444120
Paint and Wallpaper Stores
0.013242%
99.8%
561311
Employment Placement Agencies
0.012141%
99.8%
541820
Public Relations Agencies
0.011607%
99.8%
All Other Miscellaneous Store Retailers
453998
(except Tobacco Stores)
0.011385%
99.8%
Other Commercial Equipment Merchant
423440
0.009788%
99.8%
Wholesalers
Other Chemical and Allied Products Merchant
424690
0.009609%
99.8%
Wholesalers
325520
Adhesive Manufacturing
0.009522%
99.9%
221320
Sewage Treatment Facilities
0.009244%
99.9%
Refrigeration Equipment and Supplies
423740
0.008695%
99'9� °
Merchant Wholesalers
212321
Construction Sand and Gravel Mining
0.008245%
99.9%
160 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
541360
Geophysical Surveying and Mapping Services
0.008018%
99.9%
Paint, Varnish, and Supplies Merchant
424950
0.007678%
99.9%
Wholesalers
213112
Support Activities for Oil and Gas Operations
0.007015%
99.9%
Industrial Machinery and Equipment
423830
0.006360%
99.9� °
Merchant Wholesalers
562991
Septic Tank and Related Services
0.006302%
99.9%
541320
Landscape Architectural Services
0.006222%
99.9%
Research and Development in the Social
541720
0.006216%
99.9%
Sciences and Humanities
541620
Environmental Consulting Services
0.006031%
99.9%
336211
Motor Vehicle Body Manufacturing
0.004769%
99.9%
324110
Petroleum Refineries
0.004520%
99.9%
238130
Framing Contractors
0.004249%
99.9%
Mining Machinery and Equipment
333131
0.003737%
100.0%
Manufacturing
Other Metal Valve and Pipe Fitting
332919
0.003544%
100.0%
Manufacturing
541420
Industrial Design Services
0.003339%
100.0%
General Freight Trucking, Long -Distance,
484121
0.003247%
100.0%
Truckload
488999
All Other Support Activities for Transportation
0.003076%
100.0%
541511
Custom Computer Programming Services
0.002782%
100.0%
541110
Offices of Lawyers
0.002697%
100.0%
Electroplating, Plating, Polishing, Anodizing,
332813
and Coloring
0.002159%
100.0/ °
517311
Wired Telecommunications Carriers
0.001908%
100.0%
Research and Development in the Physical,
541715
Engineering, and Life Sciences (except
0.001821%
100.0%
Nanotechnology and Biotechnology)
Specialized Freight (except Used Goods)
484230
Trucking, Long -Distance
0.001735%
100.0/ °
561790
Other Services to Buildings and Dwellings
0.001419%
100.0%
0 2020 CH Advisors, Inc., All Rights Reserved. 161
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
541350
Building Inspection Services
0.001394%
100.0%
All Other Leather Good and Allied Product
316998
0.001346%
100.0%
Manufacturing
Power and Communication Line and Related
237130
0.001332%
100.0%
Structures Construction
331221
Rolled Steel Shape Manufacturing
0.001261%
100.0%
Farm and Garden Machinery and Equipment
423820
0.001207%
100.0%
Merchant Wholesalers
541211
Offices of Certified Public Accountants
0.001186%
100.0%
Administrative Management and General
541611
0.001138%
100.0%
Management Consulting Services
Pottery, Ceramics, and Plumbing Fixture
327110
Manufacturing
0.001060%
100.0/ °
519110
News Syndicates
0.000986%
100.0%
Ornamental and Architectural Metal Work
332323
0.000926%
100.0%
Manufacturing
541613
Marketing Consulting Services
0.000926%
100.0%
531390
Other Activities Related to Real Estate
0.000818%
100.0%
Commercial Printing (except Screen and
323111
Books)
0.000743%
100.0%
488410
Motor Vehicle Towing
0.000660%
100.0%
713110
Amusement and Theme Parks
0.000563%
100.0%
561910
Packaging and Labeling Services
0.000532%
100.0%
Fabricated Pipe and Pipe Fitting
332996
0.000441%
100.0%
Manufacturing
Other Commercial and Industrial Machinery
532490
o
0.000386/0
0
100.0/
and Equipment Rental and Leasing
Truck, Utility Trailer, and RV (Recreational
532120
Vehicle) Rental and Leasing
0.000340%
100.0%
Stationery and Office Supplies Merchant
424120
0.000340%
100.0%
Wholesalers
561499
All Other Business Support Services
0.000203%
100.0%
541340
Drafting Services
0.000171%
100.0%
162 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Cumulative Pct
Total Contract
Contract Dollars
Dollars
Commercial and Industrial Machinery and
811310
Equipment (except Automotive and
0.000164%
100.0%
Electronic) Repair and Maintenance
531320
Offices of Real Estate Appraisers
0.000162%
100.0%
562112
Hazardous Waste Collection
0.000137%
100.0%
562211
Hazardous Waste Treatment and Disposal
0.000118%
100.0%
Other Miscellaneous Durable Goods Merchant
423990
0.000057%
100.0%
Wholesalers
423710
Hardware Merchant Wholesalers
0.000017%
100.0%
TOTAL00.0,
Source: CHA analysis of the City data.
Table D-2: Industry Percentage Distribution of Contracts by Dollars Paid
Prime Contracts
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
Water and Sewer Line and Related Structures
237110
37.00%
37.0%
Construction
237310
Highway, Street, and Bridge Construction
36.95%
73.9%
Commercial and Institutional Building
236220
o
11.26/0
0
85.2/0
Construction
541330
Engineering Services
6.71%
91.9%
Other Heavy and Civil Engineering
237990
1 89%
93.8%
Construction
Electrical Contractors and Other Wiring
238210
o
1.45/0
0
95.3/0
Installation Contractors
Asphalt Paving Mixture and Block
324121
1 28%
96.5/0 °
Manufacturing
238910
Site Preparation Contractors
1.05%
97.6%
238990
All Other Specialty Trade Contractors
0.72%
98.3%
561720
Janitorial Services
0.42%
98.7%
238320
Painting and Wall Covering Contractors
0.37%
99.1%
541380
Testing Laboratories
0.17%
99.3%
O 2020 CH Advisors, Inc., All Rights Reserved. 163
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
561730
Landscaping Services
0.14%
99.4%
561440
Collection Agencies
0.13%
99.5%
562910
Remediation Services
0.12%
99.6%
Poured Concrete Foundation and Structure
238110
0.08%
99.7/0 °
Contractors
Plumbing, Heating, and Air -Conditioning
238220
0.08/0 o
99.8%
Contractors
Crushed and Broken Limestone Mining and
212312
0.06/0 o
99.9%
Quarrying
Surveying and Mapping (except Geophysical)
541370
0.04%
99.9%
Services
541310
Architectural Services
0.03%
99.9%
333120
Construction Machinery Manufacturing
0.03%
100.0%
All Other Miscellaneous Fabricated Metal
332999
Product Manufacturing
0.02%
100.0%
561311
Employment Placement Agencies
0.02%
100.0%
TOTAL00.0,
Source: CHA analysis of the City data.
Table D-3: Industry Percentage Distribution of Contracts by Dollars Paid
Subcontracts
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
237310
Highway, Street, and Bridge Construction
20.0098%
20.0%
Water and Sewer Line and Related Structures
237110
10.5348%
30.5%
Construction
Specialized Freight (except Used Goods)
484220
8.4162%
39.0/ °
Trucking, Local
Metal Service Centers and Other Metal
423510
5.8591%
44.8/ °
Merchant Wholesalers
Electrical Contractors and Other Wiring
238210
o
5.4506/0
0
50.3/0
Installation Contractors
164 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
Plumbing, Heating, and Air -Conditioning
238220
4.0516%
54.3%
Contractors
423840
Industrial Supplies Merchant Wholesalers
3.8923%
58.2%
327320
Ready -Mix Concrete Manufacturing
3.2797%
61.5%
561730
Landscaping Services
3.2484%
64.7%
Brick, Stone, and Related Construction
423320
3.2172%
68.0%
Material Merchant Wholesalers
Structural Steel and Precast Concrete
238120
2.3012%
70.3/ °
Contractors
238910
Site Preparation Contractors
2.1944%
72.5%
Poured Concrete Foundation and Structure
238110
2.1783%
74.6%
Contractors
541330
Engineering Services
1.9761%
76.6%
Electrical Apparatus and Equipment, Wiring
423610
Supplies, and Related Equipment Merchant
1.8843%
78.5%
Wholesalers
Other Heavy and Civil Engineering
237990
1.7152%
80.2%
Construction
484110
General Freight Trucking, Local
1.6990%
81.9%
Asphalt Paving Mixture and Block
324121
Manufacturing
1 2248%
83.1/0 °
Other Foundation Structure, and Building
238190
o
1.0008/0
0
84.1/0
Exterior Contractors
238310
Drywall and Insulation Contractors
0.9732%
85.1%
Petroleum and Petroleum Products Merchant
424720
Wholesalers (except Bulk Stations and
0.9718%
86.1%
Terminals)
238140
Masonry Contractors
0.9358%
87.0%
238150
Glass and Glazing Contractors
0.8524%
87.9%
238160
Roofing Contractors
0.7997%
88.7%
Surveying and Mapping (except Geophysical)
541370
0.7326%
89.4%
Services
332312
Fabricated Structural Metal Manufacturing
0.6823%
90.1%
0 2020 CH Advisors, Inc., All Rights Reserved. 165
City of Fort Worth Disparity Study 2020
Code Description
Contract Dollars
Total Contract
lb
Dollars
A
238390
Other Building Finishing Contractors
0.6570%
90.7%
Commercial and Institutional Building
236220
0.6010% o
91.3%
Construction
561990
All Other Support Services
0.5633%
91.9%
238990
All Other Specialty Trade Contractors
0.5358%
92.4%
444190
Other Building Material Dealers
0.5312%
93.0%
561720
Janitorial Services
0.4679%
93.4%
238350
Finish Carpentry Contractors
0.4425%
93.9%
Construction, Mining, and Forestry Machinery
532412
and Equipment Rental and Leasing
0.4326%
94.3%
238330
Flooring Contractors
0.4182%
94.7%
Other Construction Material Merchant
423390
0.3584%
95.1%
Wholesalers
Plumbing and Heating Equipment and Supplies
423720
(Hydronics) Merchant Wholesalers
0.3081%
95.4%
Oil and Gas Pipeline and Related Structures
237120
0.3079%
95.7%
Construction
238320
Painting and Wall Covering Contractors
0.2692%
96.0%
All Other Miscellaneous Fabricated Metal
332999
0.2579%
96.2/0 °
Product Manufacturing
327332
Concrete Pipe Manufacturing
0.2176%
96.5%
238290
Other Building Equipment Contractors
0.2176%
96.7%
561320
Temporary Help Services
0.1720%
96.8%
321114
Wood Preservation
0.1614%
97.0%
221330
Steam and Air -Conditioning Supply
0.1612%
97.2%
All Other Professional, Scientific, and Technical
541990
0 1592%
97.3 °
Services
331511
Iron Foundries
0.1485%
97.5%
Iron and Steel Mills and Ferroalloy
331110
o
0.1440%
o
97.6/0
Manufacturing
Direct Property and Casualty Insurance
524126
0.1400%
97.8/0 °
Carriers
166 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
339950
Code Description
Sign Manufacturing
Pct Total
Contract Dollars
0.1202%
Cumulative Pct
Total Contract
Dollars
97.9%
562111
Solid Waste Collection
0.1145%
98.0%
424710
Petroleum Bulk Stations and Terminals
0.1084%
98.1%
541191
Title Abstract and Settlement Offices
0.0989%
98.2%
238340
Tile and Terrazzo Contractors
0.0971%
98.3%
332618
Other Fabricated Wire Product Manufacturing
0.0884%
98.4%
333120
Construction Machinery Manufacturing
0.0829%
98.5%
541380
Testing Laboratories
0.0828%
98.5%
236210
Industrial Building Construction
0.0820%
98.6%
561621
Security Systems Services (except Locksmiths)
0.0817%
98.7%
314999
All Other Miscellaneous Textile Product Mills
0.0801%
98.8%
337215
Showcase, Partition, Shelving, and Locker
Manufacturing
0.0791%
98'9�0 °
326122
Plastics Pipe and Pipe Fitting Manufacturing
0.0745%
98.9%
331210
Iron and Steel Pipe and Tube Manufacturing
from Purchased Steel
0.0686%
99.0%
327310
Cement Manufacturing
0.0655%
99.1%
424590
Other Farm Product Raw Material Merchant
Wholesalers
0.0635%
99.1%
454310
Fuel Dealers
0.0606%
99.2%
327410
Lime Manufacturing
0.0588%
99.3%
541310
Architectural Services
0.0477%
99.3%
321918
Other Millwork (including Flooring)
0.0407%
99.4%
444120
Paint and Wallpaper Stores
0.0399%
99.4%
541820
Public Relations Agencies
0.0349%
99.4%
453998
All Other Miscellaneous Store Retailers
(except Tobacco Stores)
0.0343%
99'S°
�
423440
Other Commercial Equipment Merchant
Wholesalers
0.0295%
99.5%
424690
Other Chemical and Allied Products Merchant
Wholesalers
0.0289%
99.5%
O 2020 CH Advisors, Inc., All Rights Reserved. 167
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
325520
Adhesive Manufacturing
0.0287%
99.5%
221320
Sewage Treatment Facilities
0.0278%
99.6%
Refrigeration Equipment and Supplies
423740
0.0262%
99'6°
�
Merchant Wholesalers
212321
Construction Sand and Gravel Mining
0.0248%
99.6%
541360
Geophysical Surveying and Mapping Services
0.0241%
99.6%
Paint, Varnish, and Supplies Merchant
424950
Wholesalers
0.0231%
99.7%
562910
Remediation Services
0.0213%
99.7%
213112
Support Activities for Oil and Gas Operations
0.0211%
99.7%
Industrial Machinery and Equipment
423830
0.0191%
99.7%
Merchant Wholesalers
562991
Septic Tank and Related Services
0.0190%
99.8%
541320
Landscape Architectural Services
0.0187%
99.8%
Research and Development in the Social
541720
0.0187%
99.8%
Sciences and Humanities
541620
Environmental Consulting Services
0.0182%
99.8%
336211
Motor Vehicle Body Manufacturing
0.0144%
99.8%
324110
Petroleum Refineries
0.0136%
99.8%
238130
Framing Contractors
0.0128%
99.8%
Mining Machinery and Equipment
333131
0.0113%
99.9%
Manufacturing
Other Metal Valve and Pipe Fitting
332919
0.0107%
99'9°
�
Manufacturing
541420
Industrial Design Services
0.0101%
99.9%
General Freight Trucking, Long -Distance,
484121
0.0098%
99.9%
Truckload
488999
All Other Support Activities for Transportation
0.0093%
99.9%
541511
Custom Computer Programming Services
0.0084%
99.9%
541110
Offices of Lawyers
0.0081%
99.9%
Electroplating, Plating, Polishing, Anodizing,
332813
and Coloring
0.0065%
99'9/ °
168 0 2020 CH Advisors, Inc., All Rights Reserved.
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
517311
Wired Telecommunications Carriers
0.0057%
99.9%
Research and Development in the Physical,
541715
Engineering, and Life Sciences (except
0.0055%
99.9%
Nanotechnology and Biotechnology)
Specialized Freight (except Used Goods)
484230
0.0052%
99.9� °
Trucking, Long -Distance
561790
Other Services to Buildings and Dwellings
0.0043%
99.9%
541350
Building Inspection Services
0.0042%
99.9%
All Other Leather Good and Allied Product
316998
0.0041%
100.0%
Manufacturing
Power and Communication Line and Related
237130
0.0040%
100.0%
Structures Construction
331221
Rolled Steel Shape Manufacturing
0.0038%
100.0%
Farm and Garden Machinery and Equipment
423820
0.0036%
100.0%
Merchant Wholesalers
541211
Offices of Certified Public Accountants
0.0036%
100.0%
Administrative Management and General
541611
0.0034%
100.0%
Management Consulting Services
Pottery, Ceramics, and Plumbing Fixture
327110
Manufacturing
0.0032%
100.0/ °
519110
News Syndicates
0.0030%
100.0%
Ornamental and Architectural Metal Work
332323
0.0028%
100.0%
Manufacturing
541613
Marketing Consulting Services
0.0028%
100.0%
531390
Other Activities Related to Real Estate
0.0025%
100.0%
Commercial Printing (except Screen and
323111
Books)
0.0022%
100.0%
488410
Motor Vehicle Towing
0.0020%
100.0%
713110
Amusement and Theme Parks
0.0017%
100.0%
561910
Packaging and Labeling Services
0.0016%
100.0%
Fabricated Pipe and Pipe Fitting
332996
Manufacturing
0.0013%
100.0/ °
0 2020 CH Advisors, Inc., All Rights Reserved. 169
City of Fort Worth Disparity Study 2020
Code Description
Pct Total
Contract Dollars
Cumulative Pct
Total Contract
Dollars
Other Commercial and Industrial Machinery
532490
o
0.0012/0
0
100.0/
and Equipment Rental and Leasing
Truck, Utility Trailer, and RV (Recreational
532120
Vehicle) Rental and Leasing
0.0010%
100.0%
Stationery and Office Supplies Merchant
424120
0.0010%
100.0%
Wholesalers
561499
All Other Business Support Services
0.0006%
100.0%
541340
Drafting Services
0.0005%
100.0%
Commercial and Industrial Machinery and
811310
Equipment (except Automotive and
0.0005%
100.0%
Electronic) Repair and Maintenance
531320
Offices of Real Estate Appraisers
0.0005%
100.0%
562112
Hazardous Waste Collection
0.0004%
100.0%
562211
Hazardous Waste Treatment and Disposal
0.0004%
100.0%
Other Miscellaneous Durable Goods Merchant
423990
0.0002%
100.0%
Wholesalers
423710
Hardware Merchant Wholesalers
0.0001%
100.0%
237310
Highway, Street, and Bridge Construction
20.0098%
20.0%
TOTAL00.0,
Source: CHA analysis of the City data.
170 O 2020 CH Advisors, Inc., All Rights Reserved.