Philadelphia to revise procurement polices to support minority-owned businesses

Philadelphia will step up its efforts to support minority- and women-led businesses as part of its participation in City Accelerator, a program that advises cities on devising policies that improve conditions for low-income communities.

City Accelerator, which is backed by Citibank and the nonprofit group Living Cities, will give Philadelphia and nine other cities grants of $50,000, along with coaching and implementation resources to make their procurement processes more inclusive for minority business enterprises. Cities will kick off the initiative next week and will implement their own locally tailored policies over the next 18 months. 

“Inclusive procurement is a strong element in closing racial income and wealth gaps,” Ben Hecht, the president and chief executive of Living Cities, said in a press release. “When cities leverage their buying power to support the very residents that have been kept out of wealth-building activities, they are contributing to the betterment of the entire community.”

Philadelphia officials have spent more than a decade promoting inclusive procurement as part of the city’s strategies to address its stubborn racial inequality and poverty rates, which are nearly twice as high for black and Hispanic residents as they are for white residents.

That inequality extends to the city’s contracts. In 2017, Philadelphia allocated 68 percent of all contract dollars to businesses owned by white males, according to an annual disparity study. And the majority of government contract opportunities for less than $100,000 received no bids from minority-owned enterprises.

Nefertiri Sickout, Philadelphia’s deputy diversity and inclusion officer, told StateScoop those figures can be traced to a procurement process that favors the status quo, and to bureaucratic barriers faced by minority-owned businesses. But Sickout said Philadelphia will use the City Accelerator program to focus on new technology and better support for vendors. The city will host its first entrepreneurship equity roundtable this week, meeting with local small businesses and other organizations to set priorities for the initiative.

“The city has already done a good amount of work on reforming the procurement processes and making them more user-friendly,” she said. “But this is going to take a deeper dive, a really more targeted and intentional focus on outcome.” 

Sickout said a priority for the city is to accelerate the procurement processes. Delays in payment and processing take a greater toll on minority-owned businesses, which often have more limited access to capital. Basic software updates, data aggregation and other tools that increase bureaucratic efficiency can have a big impact on inclusion, she said.

City Accelerator has brought similar innovations to previous cities that have participated since the program’s creation in 2014. Past cohorts have tackled issues like community engagement and infrastructure, with member cities exchanging the solutions that they developed locally.

Other cities participating this year include Boston; Cleveland; El Paso, Texas; Houston; Kansas City, Missouri; Minneapolis; Nashville, Tennessee; Philadelphia; Pittsburgh; and South Bend, Indiana.

Philadelphia, which has participated in City Accelerator before, has used the program to improve municipal service response times and enrollment in public benefits systems. But this year’s emphasis on building equitable entrepreneurship strategies has identified a particularly important issue to the city, Sickout said. 

“That’s the strategy that I think people on the ground feel very passionate about, being able to launch a business and grow a business, and for the city to have more equitable outcomes,” she said.